Short term bike hire businesses have been around for decades. But until now they’ve mainly hired out basic cruiser style bicycles for tourists visiting iconic waterfront parks in our major capital cities.
Peter Barnes thinks he’s found a lucrative niche that has previously been overlooked—cycling enthusiasts, predominantly male corporate travellers. They want to maintain their cycling habit when they’re travelling on business, but don’t want to spend the time, money and hassles to bring their expensive bike with them, not to mention the risk of damage.
With this in mind, he’s set up a new bike hire specialist business in the heart of Sydney’s CBD that’s within a kilometre radius of most of the major hotels.
He’s assembled a fleet of high end road bikes, opened his doors and says initial business is brisk. Peter is actually taking over the original Jet Cycles site at 199 Clarence St Sydney. Initially he’s been operating from the basement, but will take over the ground floor space soon, when he plans to add a retail selection of basic parts and accessories such as tubes, pumps etc.
Peter says that because he has no plans to sell bicycles, the four existing bike shops in the street don’t see him as competition and are actually referring customers his way.
Bicycling Trade recently visited Peter at his temporary basement premises to see what promise this new business was showing.
Bicycling Trade: Tell us about Livelo… you’re focusing on high end bike hire?
Peter Barnes: “I guess it came out of my travels in a previous career. I was travelling to conferences and things like that and always missing not being able to ride my bike because it was impractical to take my bike with me.
“Often if you’re doing short stay travel and need to basically get from the airport straight to a meeting, that scenario, it’s very difficult to take your bike with you. So I’d spend so much time away from my bike and just missed getting some valuable k’s down. And I did think, ‘Why would it be so difficult to hire a high quality bike, at least as good as my bike at home and occasionally have the opportunity to try something a bit better like a new groupset, or new wheels? Why can’t I either go to the location if I was staying nearby and pick it up, or have it delivered to the hotel early in the morning when I want to go for a ride?’
“At one stage work wanted me to fly to Canberra for a conference. I talked them out of that and cancelled the flight tickets. I drove down and took my bike and I was pedalling around Lake Burley Griffin one morning in the beautiful winter sunshine and I thought, ‘Gosh! Why did I have to go to so much trouble to have this experience?’
“I wondered if anyone was doing it. I started doing some research and found that no one had a business model that was devoted to hiring good quality, high performance bikes. A number of shops do it as a bit of an add on. There’s a number of hire businesses that exist just to hire bicycles, but generally not pitching it at that end of the market.
“So I combined that research with a bit of modelling. Could it work? How would the finances add up? I got to a stage where I thought, ‘Okay there’s nothing left to do but have a go! So here we are.
BT: What was your previous career that had you travelling on business?
PB: I was a retail manager for the NSW State Government, managing a series of museum shops and publications. I ran their 13 museum shops and managed the sales and marketing of the publications and exhibition catalogues.
BT: You’ve left that to do this!
PB: “Yes, exactly. I’ve always had a passion for cycling. I was with that organisation for 16 years. At different stages during my career there I wondered what I could do different and cycling would often pop up in that thought pattern.
“Then I’d look around a city like Sydney and see great bike shops, really good operators and also online price pressures, which is something that I experienced in the museum retailing, because we sold a lot of books.
“So I just didn’t see an opening in the Sydney market for another bike shop and it wasn’t until then that I had the idea of bike hire that I thought maybe there was an opening.”
BT: Have you thought about being like an Avis or Hertz and having affiliates using your brand in Melbourne, Brisbane and beyond?
PB: “Definitely. I’d be looking to open in Melbourne this year and other sites to follow.”
BT: Are you looking for yourself to open in Melbourne or are you looking for a partner based there?
PB: “I’d be open to all sorts of options. Obviously it’s a matter of just what’s the best outcome for the business. If it’s me taking exclusive control of it that could be one option or some sort of a partnership with a person who’s already set up in the market down there.”
BT: How long have you had your doors open now?
PB: “Three months.”
BT: How’s it going so far?
PB: “It’s good. We’re doubling our revenue every month, which is pretty good. The biggest challenge we have really, is like myself, so many people who are potential clients for the business over the years have probably looked for someone like us and not found it and therefore working on the assumption that, ‘When I’m travelling around I’m not going to be able to ride. Or I do have to go to the trouble of taking my bike.’ So we’ve just got to try and get our message out there that there is an option. The people who are walking through the door and using it are saying, ‘Why did it take so long for someone to do this? This is great!’
“Once people have been in and we’ve fitted them on the bike, we keep their fit dimensions so the next time they walk through the door, the bike is just sitting there ready to go with water bottles, Garmin unit, lights flashing, ready to roll out the door. Similarly, if we deliver to a hotel in the city same scenario, the bike is ready to go.
BT: What’s a typical hire in terms of the revenue you’re making?
PB: “A typical one would be a three hour hire and for a Cannondale CAAD 10, which is $75.
“That includes whatever pedals the customer wants to use. We’ll fit Look, Shimano, Time, Speedplay or flat pedals. At the moment we’re fitting a lot of flat pedals because people are not aware they’re going to be able to use our services so they go ‘Damn, I didn’t bring my cycling shoes so I’ll just go out with flat pedals.’
“The most popular ride is one that we recommend to people is to go from the city of Sydney loop around through the Rocks, Mrs Macquarie’s Chair and the Domain, out through Woolloomooloo to Watsons Bay, Bondi, Tamarama, Bronte, back through Centennial Park and back into the city. It’s about 50kms. It’s a bit of a stop start, so no one is doing it in the same sort of speed as their normal sort of training ride would be, but everyone goes, ‘Wow, what a ride!’
“We’re getting people just doing a shorter ride. Or other people who are taking the bike for a full day hire. We’re trying to price it so that the price isn’t a barrier to people using this service.”
Peter Barnes has visions of creating a nationwide network of specialist high end bike hire stores.