How Bicycles Bring Business

Cities and businesses discover the positive economic impacts of bike lanes.

Pat Brown was just hoping to hang on in a tough economy. When she relocated her art gallery in 2008, it was the rock-bottom rent that drew her to a still struggling strip of downtown Memphis, TN. “We were just trying to survive,” she said.

Brown was betting on a small core of community members determined to transform Broad Avenue from a fast-moving thoroughfare, where traffic whizzed past boarded-up storefronts at 50 mph (80 km/h), into a bustling arts district. Little did she know that they would hit the jackpot with bicycling.

Shortly after Brown opened T Clifton Gallery, Sarah Newstok walked in. The local nonprofit Newstok led, Livable Memphis, had a vision for Broad Avenue, too. They wanted to build a protected bike lane that would pass right by Brown’s door, creating a vital connection between a popular multi-use trail and the city’s largest park. “We’re a retail business, so any time there’s a concept to bring additional traffic directly by your storefront, it’s very easy to say ‘yes,’” Brown recalled with a laugh.

In 2010, after garnering support from city officials and surrounding businesses, Livable Memphis and the Broad Avenue Arts District rolled out the idea in a dramatic way. They painted temporary bike lanes and crosswalks and invited the community to “A New Face for an Old Broad,” a celebration, complete with live music, street vendors and a kids’ bike parade down the freshly striped cycle track.

“Until then, the area had been doing art walks once a year and, at best, those were bringing in 1,000 people,” Brown said. “Our goal for this day-and-a-half event, where the street itself would be a sort of theatrical performance, was maybe 5,000 people. We had 15,000 show up. The energy level was incredible. It was a huge tipping point for us – it changed the trajectory of the revitalization efforts.”

The energy didn’t wane once the event was over and bicyclists started taking advantage of the temporary lanes. Since then, the promise of permanent facilities has drawn more than $6 million in private investment. More than 15 new businesses have opened and nearly 30 properties have been renovated. Traffic has slowed, new customers are arriving on two wheels and, suddenly the rock-bottom neighborhood is one of the hottest spots in town.

Memphis isn’t the only city where bicycling is bringing business. Increasingly leaders in the public and private sector are realizing that being bike-friendly makes good business sense, boosting the bottom line and promoting community-wide economic development. Bicycling in the United States is a $6 billion national industry and one study estimates that the spillover effects of recreational bicycling alone could be as large as $133 billion. But that’s just the beginning, barely scratching the surface of the economic impact of transportation bicycling in communities across North America.

Uncovering the Spending Power of Customers on Bicycles

Tom Birchard’s business sits at the intersection of two busy bike routes in the city that never sleeps. During the morning and evening commute, people pour past his restaurant, Veselka, in New York City, NY.

“It’s a steady stream of cyclists coming down the Second Avenue bike lane heading for the bridges to Brooklyn or downtown,” he said. “And the Ninth Street lane is the same going east-west – particularly in the morning.”

For Birchard, those bike lanes offer a tempting preview for potential customers. Passersby aren’t speeding by at 40 miles per hour; they’re traveling at a pace where they can be enticed by the sight and scent of fresh pierogies on the plates of patrons in the sidewalk café. “For me,” Birchard said, “bikes mean business.”

In the minds of many business owners, though, there’s still a direct correlation between cars and customers. Too often, the opposition to bicycle infrastructure is led by retailers who believe ample car parking space is critical to their customer base. But that belief could be depriving businesses of their best potential patrons: cyclists.

Just this summer, the advocacy group Transportation Alternatives did a travel study in Birchard’s neighborhood, the Lower East Side. They found that only a tiny fraction – just four percent – of customers arrived by car. In contrast, 23 percent arrived by bike. A study of travel patterns in the city center of Utrecht in the Netherlands showed similar results: customers on bikes significantly outnumbered those in cars (26 versus 17 percent). Even individual businesses are taking stock of how customers get to their door. The East End Food Co-Op in Vancouver, BC, conducted a survey that showed that 24 percent of its patrons usually pedaled to the store – more than the number of people who drove.

That’s good news, because a growing body of research shows that people who arrive on two wheels have a bigger impact on the bottom line, too. Recent research out of Portland, OR, showed that cycling customers spent more per month ($75.66) than their car-driving counterparts ($68.56) at bars, restaurants and convenience stores. A 2009 study of Bloor Street in Toronto, ON, found that customers who arrive by foot and bicycle visit the most often and spend the most money per month.

Why do people who arrive on bicycles spend more money? Researchers in Muenster, Germany, suggest that because bicyclists buy smaller quantities and thus shop more frequently, they’re “exposed more often to temptation” – more likely to get extra items that aren’t on the shopping list. So it’s not surprising that a survey of 1,200 consumers in Bern, Switzerland, found that businesses made more profit per square meter of bike parking ($9,900 per year) than car parking ($8,800).

For Birchard getting more bike parking is more than an amenity for bicyclists – it’s a business imperative. “Across the street from me, the coffee shop put in a bike corral, and it’s always full,” he said. “We need many, many more.”

How Businesses Are Cashing In on Bicycles

Jeff Motch wasn’t trying to cater to fellow bike riders when he put a bike in the logo of his business, the Blind Lady Ale House. But as soon as he opened his restaurant in San Diego, CA, his clientele started asking: So what’s the connection to biking?

“Bicycle people were attracted to our place, even though it wasn’t intentional,” Motch said of the logo. “And when you tap into a small, core group like that, word spreads very quickly.”

Motch started offering a 10 percent discount for anyone who arrived by bike and built a large and loyal fan base faster than you can brew a batch of pale ale. On Sunday mornings, Blind Lady is the meeting spot for social rides, like the annual Growler Run, which takes participants to a local brewery. Now, on any given weekend, Motch’s place is packed – and a sizable percentage of patrons are cyclists. “I have 20 or 30 bikes outside my place on a Friday night,” he said.

Increasingly, businesses across the country are trying to tap into the spending power of cyclists. In 2008, the League of American Bicyclists launched its Bicycle Friendly Business (BFB) program, setting clear criteria for how employers can encourage cycling among their staff and customers and recognizing companies at the Bronze, Silver, Gold or Platinum level for their achievements. From small coffee shops to major corporations, a staggering 480 businesses in the US have earned a BFB designation. Hundreds more have applied.

“Even we couldn’t have expected the incredible interest and buy-in we’ve seen in just a few short years,” says Andy Clarke, president of the League of American Bicyclists. “Some of the most iconic companies in the country – Facebook, Apple, and General Mills, to name a few – are realizing bikes can boost their bottom line.”

Standing Stone Brewery, in Ashland, OR, is just one of the hundreds of BFBs that have made small bike investments and seen big payoffs. “Working with the City of Ashland to trade a car parking space for bike parking spaces has definitely led to more business,” says manager Danielle Amarotico. “While we paid to fabricate and install the rack, it’s set the stage for customers to realize that we’re bike-friendly and have gone the extra mile to promote cycling in our community.”

Because that rack sits right in front of the restaurant, it’s become a central hub for community bike parking in all of downtown. And that external welcome is just the beginning. Standing Stone also buys a new bike for all of its employees and financially supports local cycling events. “That exposure brings large numbers of locals and visitors in our doors,” Amarotico added.

For Motch, though, it isn’t just about revenue. It’s about making his work meaningful. “What’s been so awesome for us is [being bike-friendly] brings us the kind of person we want coming through our door,” he says. “People who are active – not just active in their lifestyle, but active in their community.”

That sense of engagement has become a draw for new businesses in bicycle-friendly areas. “I never thought I’d leave San Francisco to move back to my hometown; it’s too car-centric for my taste,” said April Economides, the owner of Green Octopus Consulting. “But mine is just one of 25 businesses that have moved to, opened, or expanded in Long Beach in the past three years because of the city’s bicycling progress.”

In a growing number of communities, retailers are going beyond individual efforts and banding together to find ways to appeal to cyclists. In 2010, Economides oversaw the development of the first Bicycle-Friendly Business District (BFBD) in Long Beach. Put simply, Economides said, a BFBD is a commercial district where merchants encourage people to bike to the area and integrate bikes into their district’s promotions, events and operations. The concept is catching on in other cities, too, including Oakville, ON, and New York City.

After all, being more bicycle-friendly provides solutions to vexing problems like parking. Motch, of the Blind Lady Ale House, suggested a then revolutionary idea to encourage more people to attend the annual street fair in his San Diego business district. Because of limited space and massive crowds, attendees had to park in a distant lot and take a shuttle to the festivities. At first, when Motch suggested offering a bike valet service, his fellow retailers scoffed. How would they find the space? And would people really use it? “I found eight parking spaces I could do it in, set up a bike valet and we had more than 100 bikes,” Motch said. Needless to say, bike valet is now a standard offering at the annual street fairs.

And, while bicycling clearly brings business to retailers, the equation works both ways. In the Long Beach BFBDs, business owners like Proum Ry, owner of Wa Wa Restaurant, have access to an informal bike share. Thanks to the use of the communal bike, Ry is now able to take his business directly to customers, extending his take-out service to delivery, too. “I love the district bike,” he said. “It’s so useful for my business, from making fast and easy deliveries to running business errands. Plus, when business is slow, I take it for a cruise along the beach!”

Investment in Infrastructure Is Investment in the Economy

Nestled along the Vancouver, BC, seawall, with stunning views of the Vancouver Harbor, De Dutch restaurant has more to offer its patrons than delicious pancakes. There’s just one potential problem with the picturesque setting: facing the water, the cozy café has no street storefront, no opportunity for passing motorists to see the restaurant and stop in for brunch. But De Dutch has an even better type of thoroughfare, bringing countless hungry diners right to its door.

The Trans-Canada Trail, a walking and biking path, runs directly in front of De Dutch. With marked bike lanes, secure parking, a bike rental shop, and a seawall built to accommodate herds of cyclists, the area has become a hub of activity. “The trail has done wonders for bringing people down to the local businesses that are on the water,” De Dutch’s general manager, Michael Prince, said. “Local businesses in Vancouver, especially new ones like us, depend on local traffic. People being given a reason to find you and be around your business is gold.”

Vancouver isn’t the only city where business owners are seeing the benefits of bike infrastructure. In San Francisco, a survey found that nearly two-thirds of business owners along the Valencia Street bike lanes thought the facilities had a positive impact on their sales. More than half thought that the bike lanes help area residents spend more locally and more than 40 percent believed they bring new customers into the neighborhood.

A recent report from the New York City Department of Transportation found significant evidence of the economic benefits of bike infrastructure, too. According to the NYC DOT, retail sales on Ninth Avenue are up 49 percent since the street’s protected bike lanes were installed – that’s 16 times the area growth rate. And on First and Second Avenues, where cycling is up 177 percent thanks to new cycle tracks, commercial vacancies are 47 percent lower than the rest of the area.

And painted lanes aren’t the only type of bike facilities that are proving lucrative for businesses. In Washington, DC, the Capital Bikeshare system has won widespread support and ridership, with more than 18,000 annual members and 225,000 casual riders. That’s good news for businesses close to the nearly 200 stations. According to a recent survey, 83 percent of Capital Bikeshare users said they were more likely to shop somewhere close to a bike share station.

Those types of amenities are now influencing where new businesses set up shop. Just ask Lauren Lilly, owner of Yellow 108, which sells sustainable headwear and accessories. Originally, Lilly intended to locate in Los Angeles but shifted her focus to nearby Long Beach when she learned of the city’s investment in bike infrastructure. “We chose to move our office and store to a great building on the bike lane on Third Street because our core demographic would be passing by regularly,” she said.

Even city officials and transportation planners are recognizing that the small cost of bike infrastructure provides a big payoff for taxpayers and business owners. While the price tag on a bike lane is a fraction of the cost of a single mile of freeway, researchers at the Political Economy Research Institute found that building bicycle and pedestrian infrastructure creates nearly 50 percent more jobs than road-only projects. And that’s just the beginning of the equation.

A recent study from North Carolina’s Outer Banks showed that the one-time investment of $6.7 million for a network of bike lanes has yielded an annual nine-to-one return thanks to increased bicycle tourism. According to the Rails-to-Trails Conservancy (RTC), Portland, OR, is just beginning to see the swell of benefits from its 300-mile (500-kilometer) bicycle network. Based on fuel savings and health care costs, RTC estimates that by 2040, the $57 million investment will generate net benefits of $1.2 billion, more than eight dollars for each dollar spent.

Bicycles Appeal to the Next Generation

Using little more than chalk, cardboard, and plastic cones, Jason Roberts did in six hours what traditional tactics couldn’t do for decades. In partnership with local advocates and city officials, the founder of Team Better Block, a consulting firm that creates temporary demonstrations of complete streets, visited Tulsa, OK, with the challenge of jump-starting the economic engine of long-struggling Whittier Square.

Roberts’ tools were cheap and commonplace: crosswalks marked with white tape and bike lanes delineated by cardboard. Cones and angled parking took the busy thoroughfare down to two lanes.

And suddenly, everything changed.

“It was a Wednesday night and we didn’t really advertise the event,” Roberts recalled. “But just by putting in bike lanes and a few pop-up shops, all the cars in the area started stopping. The food trucks ran out of food, and the retailers were telling me, ‘We just don’t do this kind of business.’” Roberts’ response was simple: Create a better streetscape and those ringing cash registers could become the new status quo.

Both advocates and city staff have sought out Team Better Block to replicate that process in cities nationwide. Already, some of those demonstrations are becoming permanent installations – even in markets not known for their bike-friendliness, like Dallas and Fort Worth, TX.

That’s not to say that Roberts doesn’t often face resistance from the business community. Last year, his team was invited to reimagine a six-lane thoroughfare in Wichita, KS, but the city planner anticipated a challenge. In this conservative town, he cautioned, innovative ideas from Copenhagen and even New York City won’t be well received. While skeptical business owners were openly wary at the outset, opposition quickly fell away when they saw the temporary bike lanes and pedestrian islands in action. Almost overnight, the owners of the doughnut shop, the gourmet soup café and other establishments became the strongest supporters of making the bike facilities permanent. “Wide roads act like moats, cutting off one neighborhood from another,” Roberts said. “We stitch that back together again.”

By restoring the fabric of the city, biking has become an economic development tool for many cities. Bike improvements in Minneapolis paid huge dividends when the massive advertising firm Colle + McVoy relocated from the suburbs specifically because of the impressive trail network and better biking. “Our employees are healthier, happier and more productive,” the company’s CEO said in a newspaper article. “We’re attracting some of the best talents in the industry.”

Even in New York City, biking is adding a shine to the Big Apple. As the city was considering the adoption of a bike share system, 33 executives at high-tech companies like Foursquare and Tumblr publicly urged the mayor to support the bike share as a means to “attract and retain the investment and talent” necessary to be competitive.

After all, the next generation of workers – and consumers – are less interested in driving than their parents. According to a recent report from the US Public Interest Research Group, the average American drove 6 percent less in 2011 than 2004. Among young adults (16- to 34-year-olds), car use plummeted 23 percent from 2001 to 2009.

Appealing to that demographic has made cycling cities all the more attractive to the most innovative companies. Late last year, with the opening of another protected cycle track in Chicago, IL, Mayor Rahm Emanuel emphasized that “it’s no coincidence” that bicycling and business are both skyrocketing in the Windy City. “We moved from 15th to 10th worldwide in start-up economy,” he added. “No city worldwide moved that far that fast that quickly . . . And you cannot be for a start-up, high-tech economy and not be pro-bike.”

In Roberts’ neighborhood in Dallas, bicycling isn’t just a transportation option; it’s a signal about the values of the community. “The impact of this bike infrastructure isn’t just safer streets,” he said. “It’s a statement to the rest of the city that this is a different part of town. We’re seeing this influx of the creative class. It’s palpable and they weren’t moving here five years ago. That’s really a huge advantage. Just about every city is doing everything it can to woo the next generation, and they’re looking for better public amenities.”

For Pat Brown, the next generation for Broad Avenue in Memphis couldn’t be brighter. Businesses on the once-struggling strip aren’t just surviving – they’re thriving. “In the two years since we’ve just been talking about the bike lanes, we’ve seen exceptional growth – at least 50 percent per year,” Brown said. “We’re counting the days until [the bike lanes] are permanent. We couldn’t be more excited.”

This article originally appeared in Momentum Mag April/ May 2013. Issue 60.

Carolyn Szczepanksi is the director of communications and Women Bike at the League of American Bicyclists, which promotes and protects the rights of people who bike in communities across the US.


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