Barclays Bank Has a New Venture... Bicycles?

While in London last week, I came across a great new service sponsored by Barclays bank. The service is called Barclays Cycle Hire and opened in July 2010.

Docking station near Buckingham Palace

The premise of the service is the following: Instead driving your car, taking the underground, walking, or riding your own bike, you can rent a bike from a Barclay's docking station and turn it into a different Barclay's docking station near your workplace, gym, etc. To use the service, you have to pay a daily, weekly, or annual access fee plus a usage fee based on how long you rent the bike for on each trip. I have not run the numbers yet, but the apparent benefits are that one does not have to buy a bike, pay for maintenance and storage, or worry about your bike or parts of your bike being stolen. I rented a cycle while in London for a 30 minute trip and saved about a pound ($1.60) compared to what I would have payed using the underground and got to my destination just as fast.

One thing that I found very interesting was the pricing scheme. See below.

The pricing scheme is clearly encouraging short, quick trips, and heavily discouraging longer trips. They recognize this on the website as well.

"To hire for more than a couple of hours it might be cheaper for you to use a company that specialises in hiring for longer periods."

A ride less than 30 minutes has no additional cost other than the access fee that you pay upfront, whereas if you rent a bike for 3 to 6 hours you have to pay 35 pounds (roughly $60)! No quantity discounts here. For more info on the pricing scheme, click here.

By adding a financial penalty for longer rides, Barclay's is trying to manage the supply of cycles at docking stations so that the service does not lose the convenience factor. Imagine showing up expecting a bicycle and they have all been checked out, the nearest docking station is a 10 minutes walk away, but you need to be at work in 20 minutes. I assume Barclays is profit maximizing here and thinks that this pricing structure will help them the earn the highest return possible on their investment. In addition to potentially losing other customers, longer rides could mean there is a greater chance for the bike to be damaged or stolen by other citizens.

I think Barclay's is really onto something here. I am sure they will need to make adjustments to their model as they gain more experience in this business, but I think they will do very well in a city like London where transportation costs and living expenses are high, and the city is becoming more and more biker friendly. A company called B-Cycle appears to be offering a similar service in the US at a much smaller scale, although the pricing scheme seems to be somewhat different.

What do these pictures have in common?

They were all taken in Madrid, Spain. Several upcoming posts will be inspired by my recent trip to Europe.

Behind the Blog

Zackonomics was recently featured in the Behind the Blog Series over at Dan-Oliver.com. There is some information about my inspiration for blogging, my creative process, and my plans for this blog in the future! (I should note that Dan is my brother who encouraged me to try out blogging, and I've thoroughly enjoyed it.)

Also, take at look at the Behind the Blog series if you are looking for other blogs to add to your RSS feed. I've found several good ones via the series.

The Best American Sports Writing 2010 - FREE!

The Best American Sports Writing 2010 is a must-read book - a compilation of the best sportswriting published in 2009. This book is not just for sports fans, but anyone who enjoys great writing. I just starting reading it, and can't put it down. I've taken the time to link all 26 articles because I want others to enjoy them as much as I have. All articles are free to read except for one. If you prefer the real thing, it will only set you back $5.98 on Amazon)

Below is the linked table of contents of The Best American Sports Writing 2010. Please post comments about your favorite articles, and any other suggestions for sports reading.

The Way It Should Be by Thomas Lake

Shadow Boxing by Wright Thompson*

Offensive Play by Malcolm Gladwell*

The Impossible Redemption of Jonathan Boyer by Steve Friedman

Whatever Happened to Greg LeMond? by Mike Magnuson

Ripped. (Or Torn Up?) by Cynthia Gorney*

The Ghost Course by David Owen*

Flat by Jennifer Kahn

Close to Home by John Brant

(Still) Life by Skip Hollandsowrth*

The NFL's Jackie Robinson by Alexander Wolff

NBA Leads This Race by Bob Ryan

Allonzo Trier Is in the Game by Michael Sokolove*

Failing Our Athletes by Bob Hohler (Boston.com subscribers only)

The No-Stats All-Star by Michael Lewis*

This Is Your Brain on Football by Jeanne Marie Laskas

This Is Ted Johnson's Brain by Robert Sanchez*

Scout's Honor by Bill Plaschke

Stay in the Moment (with Doctor Baseball) by Karl Taro Greenfeld

The Death of a Pitcher by Eric Nusbaum

Dream Derailed by Mike Sielski

The Revolutionary by Richard Hoffer*

The Ever Elusive, Always Inscrutable, and Still Incomparable Bobby Orr by S. L. Price

Life Throws Bernie Kosar for a Loss by Dan Le Batard

The Man Who Never Was by Mike Sager

Chasing Jose by Pat Jordan

*personal favorites

If you want to save this list or print it out, click here for a word doc.

10 Questions with Wendy Kopp

Rick Stengel over at Times.com sits down with Teach for America founder Wendy Kopp with 10 questions about TFA. Wendy's idea for TFA was borne out of a dissertation that she wrote while at Princeton. For those of you who don't know much about the program, this is a good primer on what the program is all about. I'm nearing the end of my two year commitment in TFA, and even I learned that she hopes to double the amount of incoming corp members over the next five years. I highly encourage those of you who are interested to apply.

Egypt's Military - Bottled Water and Microwaves

Egypt's military produces consumer products and even operates resort hotels. Articles here and here. Part of the reason that they have maintained relative peace in Egypt is because they have a large economic interest in stability. Their customers are the people of Egypt. Check out this interesting podcast from NPR's Planet Money about the topic.

Greg Mankiw on Higher Education

Grew Mankiw comments on higher education in his latest NY Time piece:

[...] we should view higher education in the United States as one of our most successful export industries. The United States has 5 percent of the world’s population but most of the best universities. Is it any wonder that students from many nations flock here to learn? And as they do so, they create opportunities for Americans — from the professors who teach the classes to the grounds crews who maintain the campuses.

 I couldn't agree more. I alluded to the University Economy a few weeks ago in my post about US Higher Education.

Inflation at the Gas Station - 2010 CPI

Inflation slowed last year. Compared to 2009 inflation of 2.7 %, 2010 inflation fell to 1.5 %. Overall, energy prices are rising at the fastest rate despite a slight decline in natural gas prices. Food prices are also rising again, whereas in 2009 they were falling. Meats, poultry, fish, and eggs are leading the way with prices increasing an average of 5.5 % in 2010. Dairy had an increase of 3.7 % in 2010.

Here are a couple of charts that I put together based on the Bureau of Labor Statistics 2010 CPI-U data.

 

Here is a PDF of the charts for better viewing.

A Victory in Egypt?

As President Mubarak left Cairo today, it appears to be the first major victory for the protestors. Articles here and here. The process of restoring order in Egypt is far from over, but this is a step in the right direction. The period of transition that is starting to take place will offer its own unique challenges for the people of Egypt.

Meanwhile, Mubarak is reportedly staying in the coastal resort town of Sharm el-Sheikh located approximately 350 miles from Cairo. The Red Sea resort town of Sharm el-Sheikh is nicknamed "The City of Peace." Hopefully the name will hold true. After all of this time on the streets of Cairo, protesters may be ready for a vacation of their own.

Courtesy Google Maps

Consumer Price Index - Interactive Chart

Very cool interactive chart about inflation over at the NYTimes. It is from May 2008, but I have not been able to find an updated version.

Click for interactive chart. (Source: NYTimes)

(Hat Tip: My Money Blog)