Transport for London looks for £3.5bn of commercial revenues
TRANSPORT for London (TfL) has begun searching for a new sponsor of the city’s bicycle hire scheme, hoping to bring in more money and a long-term partner following Barclays’ departure.
The Mayor of London, Boris Johnson, has written to 200 of TfL’s biggest advertisers to gauge interest in sponsoring the bicycles, which were launched on the streets of London in July 2010.
TfL said today a new partner will have the right to choose a new colour for the 10,000 bikes and could be in place early next year, ahead of the end of Barclays’ contract in August.
TfL’s commercial development director Graeme Craig said the organisation had “learned a lot” from working with Barclays, whose tie-up brought in around half of the £50m in contributions targeted by Johnson. The bank received discounts on its sponsorship payments when the bikes attracted fewer users than expected.
Barclays said in 2011 it had extended the partnership until 2018, but last year agreed to bring the deal to an end as originally planned in 2015.
“With the new contract we will define the measures of success of the scheme, and we wouldn’t want these things to be outside our control. We won’t have a discount depending on the number of users of the scheme,” Craig told Morning Wire “It will be down to the new sponsor to help set the discount provisions.”
The new deal will not cover the city’s cycle superhighways, which were painted in the Barclays blue colours. TfL expects the new partner to pay £5.5m a year for seven years of sponsorship, compared to the £5m-a-year contribution that Barclays made.
Craig hopes the new sponsor will “work with us to redefine what the scheme will be after 2017”, once Serco’s contract to run the scheme on behalf of TfL runs out.
While the bikes remain by far the biggest piece of sponsorship business on TfL’s books, Craig said his team is in “a number of different discussions over a number of different areas” of the transport network that could be commercialised. TfL has set a goal of generating £3.5bn in commercial revenues over the course of ten years.
Asda, Tesco and Waitrose are this year rolling out click-and-collect points at Tube stations and carparks. Craig said that by the summer, there will be around 140 carparks offering this service from half a dozen retailers.