The British Independent Retailers Association has called for a review on the Cycle To Work Scheme after traders call for better share of the profits.
Bira, who work with over 6,000 independent businesses of all sizes across the UK, merged with the Association of Cycle Traders in June 2023, said more needs to be done to protect the sellers and asked for a comprehensive review of the current profit-sharing structure within the Cycle to Work scheme.
Andrew Goodacre, CEO of Bira:
“Independent cycle retailers, who play a pivotal role in fulfilling orders and supporting the scheme’s objectives, are experiencing a disproportionate share of the financial burden. The current profit margins for retailers on bikes sold through the scheme are less than 3%, while the scheme operators, as per figures obtained by Bira, enjoy an impressive 45% profit margin.”
Originally established to promote cycling as a sustainable means of commuting, the scheme has evolved over the years, but concerns have been raised about the equitable distribution of profits among stakeholders.
The Cycle to Work scheme, which has been in existence for many years, incentivises individuals to cycle to work by providing discounts on bicycles and tax incentives through salary sacrifice schemes. While various schemes now exist, the market is predominantly dominated by a few key players.
Andrew Goodacre, CEO of Bira:
“The cycle-to-work scheme is still the right idea to improve people’s health and reduce carbon emissions. However, it is now clear that the schemes supporting the cycle to work need reviewing so that the risks and profits are shared more equally. Orders are fulfilled by retailers, many of them independent, but the way the scheme works means that they earn very little from the sale of the bike. The bulk of any profit appears to remain with the owners of the various schemes,”
Mr Goodacre said the unfair distribution of profits was exacerbated by the fact that retailers bear the brunt of the risk involved in the process. Retailers must order the bikes, set them up, and are left with unwanted stock if consumers change their minds.
Furthermore, concerns have been raised about the evolving nature of the scheme’s usage, with retailers observing a shift towards personal use rather than commuting purposes. Over 400 ACT members have voiced their concerns by signing a petition for change, prompting a joint initiative by Bira and ACT to call for a thorough review of the Cycle to Work schemes.
Andrew Goodacre, CEO of Bira:
“Together with the ACT, we are calling for a review of Cycle to Work schemes, including an audit of usage. We want the Cycle to Work scheme to be retained, but it must be fairer for everyone involved, meeting the needs of the end-users”
