LONDON (AdAge.com) -- Vélib, the popular bike-rental scheme in Paris, is costing outdoor specialist JC Decaux far more than the company originally anticipated, because around 80% of the 20,600 bicycles have been either damaged or stolen.
JC Decaux funds the program, which it won in a bid for a package that includes ownership of Paris's 1,600 prime outdoor advertising sites. The bikes and bike stations do not carry any advertising, but the billboards brought in an estimated $30 million for the first year of operation, starting in mid-2007.
The company is bound by a 10-year contract. A JC Decaux spokeswoman said, "We are in negotiations with the city of Paris to make the contract more fair and we hope that the city will pay for part of the vandalism costs." The bikes are 99% recyclable and cost only $1.50 a day or $7.30 a week to hire.
Remi Pheulpin, JC Decaux's director general, told Le Parisien newspaper that the current contract is unsustainable. He said, "It's simple. All the receipts go to the city. All the expenses are ours. If we want the Vélib setup to keep going, we'll have to change the business model."
JC Decaux employs 400 repair staff, maintains 10 electric repair vehicles and a floating workshop that moves up and down the river Seine. The company has reinforced the bicycles' chains and baskets, and added better theft protection, but it hasn't stopped determined thieves and vandals.
The Vélib program is part of an attempt to "green" the French capital and encourage exercise. It is extremely popular, with more than 63 million rentals recorded to date, yet Parisians continue to abuse the scheme, with 20 abandoned bikes found every day and 1,500 bikes repaired daily. There's even a black market for stolen Vélibs in Eastern Europe and Africa.
"Vélib" is a contraction of the words "velo" (cycle) and "liberté" (freedom). The bikes have fallen victim to a craze known as "vélib extreme," with videos appearing on YouTube showing users going on urban joyrides and pushing the rental bikes -- designed purely for short city road journeys -- to the limits of their capabilities.
There are plans to introduce similar schemes in London, San Francisco and Singapore. The Vélib is modeled on Vélov, in another French city, Lyon, which users have treated more respectfully. However, not all Parisians are maltreating the Vélibs -- one repairman reported a bike that had been lovingly customized with fur-covered tires.