Bike subscription: The bike, reinvented

Why not transfer the successful Spotify and Netflix model to the bicycle? That's what the founders of Swapfiets thought. The Amsterdam-based company has made bike subscription popular, and is growing rapidly as a result. Their bikes, with their blue front tires, are a feature element of the cityscape in many places. Swapfiets and its competitors are looking to service a gap in the market left by purchasing, leasing and short-term hire models. Can that succeed?

Bike-sharing enjoys something of a mixed reputation. On the one hand, riding a bike is good for the environment and good for your health – and practical too, so long as you can always get hold of a bike when you need one. For this, one system that works very well is bike-sharing using docking stations. In many cities, the first half hour is free, and as a tourist you can readily explore your surroundings that way. You suddenly see Chicago, Paris or Vienna from a completely different viewpoint - for example, the places between underground stops are no longer simply white spaces on a map.

On the downside, hire bikes operating without docking stations have seriously hampered advances in mobility. Providers complain about vandalism and destruction. A further problem for bikes without docking stations is that the tough competition results in hire bikes piling up in the streets – and with large numbers of bikes ultimately ending up as scrap. The incredible images of meter-high mountains of scrapped bikes from China confirm as much.

The fourth option, alongside buying, leasing and short-term hire, could offer a solution to problems like these: bike subscription. Anyone who has ever touched the sticker-covered handlebars of a hire bike left lying around knows there's a difference between short-term and longer-term hire.

Companies like Swapfiets offer bikes as a long-term subscription – which works like a flat-rate payment for the bike. Customers rent them for a monthly fee. If anything is wrong with the bike, it is replaced or repaired. If the bike gets stolen, then if you settle the insurance excess you will get a new bike. Swapfiets calls the whole arrangement "swapping". And for as long as you want it and unless there is a reason for swapping, the bike is always at home, ready for use.

The three Swapfiets-Founders developed their business idea at university. © Swapfiets

The belief in bike subscriptions remains unshaken

The market for bike subscriptions is booming. Swapfiets is the most successful provider. But there are challengers: Smafo, Dance, Rid.e, E-Bike Abo. The last-named of these is also exhibiting at IAA MOBILITY. The bikes are different, and the price is adjusted to reflect the equipment on it. But the subscription model is the same.

The fashionable e-bike provider VanMoof has now pulled out of the subscription market, and has gone back to selling its bikes. But the belief in bike subscriptions remains unshaken: Last year, Dance was able to attract EUR 15 million in venture capital. And there's a simple reason for that: In Germany, people want to ride bikes. Five million bicycles were sold here in 2020, which is a growth rate of 17 percent. Whether potential buyers would also opt for a subscription is open to question. But the desire to ride a bike is constantly growing.

Swapping, instead of storing a broken bike at home

Different from leasing - as offered by the German mail-order company and IAA MOBILITY exhibitor fahrrad.de, there is the 'Jobrad': As the name indicates, the "Jobrad" is linked to your work. The leasing charge is deducted from your gross pay, like with a company car. But with a subscription, you do not have to involve the employer, and you are not committed to the offer for longer than one month. But it's worth noting that two years of leasing from Swapfiets costs just over EUR 500 – which would cover the price of a cheap bike. However, if you buy a bike then it needs to be repaired and maintained. After a couple of years, those visits to the bike repair shop start to mount up. "It struck us that the people we knew were riding really bad bikes. And that it annoyed them to have to take those bikes to be repaired," says Steven Uitentuis, one of the founders of Swapfiets. And this is where Swapfiets and similar companies are finding a potentially broad niche market: In Germany, there are close on 80 million bikes, with half of them probably cluttering up the house, broken and unused.

Typical for Swapfiets: the blue front wheel. © Swapfiets

Swapfiets on test

In an in-house, six-month test, the bike lived up to everything you might demand of a bike for around town. It is heavier than a road bike, but also more robust – hence "fiets". It's the term the Dutch use to refer lovingly to the robust workhorse of a bike that gets used every day. The high-quality Shimano hub gear works perfectly on the Swapfiets. The bike with the blue front tire comes with lights, mudguard, a luggage rack and a lock as standard.

A commuter bike doesn't need anything more than this. The monthly fee is fair for the features it offers. There can almost be only one answer to the question as to how Swapfiets can offer a high-quality bike with an estimated value of EUR 600 for just EUR 20 per month: Economy of scale. In other words, the Swapfiets business model only pays off if lots of customers are riding the blue-tired bikes. On that point, it looks as if the founders of Swapfiets have put their faith in the right bike. By the end of 2021, the number of users is set to grow from the current 220,000 to 300,000.

The IAA 2021 will focus on innovative mobility in all its forms. Intelligent traffic solutions, visionary ideas, automobiles and the entire mobility chain. Everything that will shape the mobility of tomorrow and turn it into an experience. Come to the show!