Boom in business bicycles
“The number of bikes leased has tripled”
May 17, 2024, 5:29 p.m
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More and more people are leasing their bikes through their employer – and often opt for very expensive models. Jobrad managing director Florian Baur talks about a rapidly growing business model and the criticism of it from some retailers.
Why should I lease a bike instead of just buying it?
Florian Baur: The model is very simple: the employer leases the bike for the employee. And the leasing installments are paid from the gross salary. Since the bike is only taxed at up to 0.25 percent of the list price as a monetary benefit, up to 40 percent of the cash purchase price can be saved.
Doesn’t that encourage you to buy more expensive models – i.e. bikes that you wouldn’t normally be able to afford?
That’s exactly what we see, yes. The average bike price for us is around 3,800 euros. The normal bicycle trade is around 1000 euros less. The savings motivate people to buy bikes that they normally wouldn’t or couldn’t buy.
Are the high average prices mainly caused by e-bikes?
Yes. Over 80 percent of all our bikes are now e-bikes.
How widely is the model used?
As an industry, we have seen an increase of almost 300 percent since 2019. The number of leased bikes has tripled. As a company, we now have 1.5 million bikes on the road. You have to say: We have helped shape the bicycle market in Germany. For many companies, it’s actually no longer possible without company bike leasing.
This market has experienced wild ups and downs in recent years. During the Corona period, demand was high, but there were hardly any wheels because the supply chains had collapsed. Now there is a lot of supply, but significantly less demand. What does that mean for Jobrad?
Fortunately, this does not affect our business model; we are growing very steadily. However, we are noticing that the shift to company bike leasing is becoming even stronger. So we are pulling the industry even harder than before.
The Jobrad model is also based on the fact that the company demands discounts from cooperating bicycle dealers. Some retailers are now criticizing discounts that are too high. Is that justified?
We are now by far the largest bicycle buyer in the German market. And if we lease the bikes, we get a purchase discount of between four and six percent from the specialist dealer, based on sales. These discounts were previously capped, and we have removed that cap. This was met with a lot of criticism from the market, some of which was justified and some of which was unjustified. I can understand the criticism in that the timing was stupid. We came up with this measure at a time when the market was already unsettled and many traders had liquidity problems. But we also reacted to that.
How exactly?
With two major initiatives. One was for cargo bikes, a market segment that was disproportionately affected. There is now a subsidy for every cargo bike sold. Secondly, we give a subsidy to dealers who offer good service. We want to motivate dealers to provide good service for job cyclists.
What was the price of the most expensive bike ever leased through Jobrad?
We’re locked in at 14,999 euros. This is the cap that the leasing regulations give us. We have a few bikes that are relatively close. There is everything between high-end racing bikes and mountain bikes. You can also spend a relatively large amount of money on cargo bikes. There are many lovers who actually dig that deep into their pockets.
With Florian Baur said Nils Kreimeier.
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