CAT’s Cycle to Work scheme
by Warren McLaren, Sydney on 12. 6.05
Meet Lucy Stone, proud non-owner of a new bicycle to ride to work. An Information Officer at the UK’s Centre for Alternative Technology (CAT), Lucy is the first employee to test out a scheme launched just a week ago. Called ‘Cycle to Work’ employees chose a bike, which CAT then buys, and rents back to them as a payroll deduction, over 1 to 3 years. The deductions come from Lucy's before tax gross salary, so she saves money. (A process also known as salary 'sacrifice' or 'packaging’). When the 3 years are up, CAT will sell the bike at less than the original purchase price. Lucy gets low cost transport and CAT get a healthy, fit employee (CAT note that “every year British workers take 166 million sick days, costing employers over £11 billion”) and our planet gets less greenhouse gases. Smiles all round. It would appear that employees can also access ‘cyclists' safety equipment’ as a tax-free benefit. The tax exemption program falls under the UK Government's Green Transport Plan and their Department of Transport have all the nitty gritty. ::CAT’s Cycle to Work
If the goal is to be more environment friendly, or to offer the use of a quality bicycle to someone who couldn't afford the price up-front, then this seems to succeed admirably.
That said, I'm not sure that I agree with the calculations in the article. Apparently, an employer "rents back to them as a payroll deduction, over 1 to 3 years. The deductions come from Lucy's before tax gross salary, so she saves money."
So, at the end of the rental period, Lucy has reimbursed her employer for the cost of the bicycle, and she is now the proud owner of- nothing. If she wants to own the bicycle, she then needs to negotiate a selling price for it, even though she's already paid her employer back for it. I'd be much more optimistic about a rent-to-own scheme, or one with a longevity bonus (If you stay with the company long enough to pay back the bike, you can purchase it for a nominal amount; say, $1)
In Lucy's case, if money were an issue, it seems that she'd best save money by buying a used bike, or joining a bicycle co-op and earning one through sweat-equity.
Even so, it's encouraging to see that businesses and government are seeking and encouraging alternatives to employee transit.
Anyone want to bike to work with me (local weather: http://my.excite.com/weather/obs.jsp?id=USMI0396)? No? Me neither.