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50cycles boss brands Cycle to Work intermediaries a “parasitic service”

An e-bike retailer has warned against using third-party intermediaries for Cycle to Work schemes, branding them a “parasitic service”.

Scott Snaith, co-founder and CEO of 50cycles, is one of a number of sellers that support the Government initiative aimed at getting workers out of their cars and onto two wheels instead.

But while he is a fan of the programme, he says third party agencies involved are “not fit for purpose”, claiming they ‘slow the process down’ and charge retailers up to 15% commission, a cost which is often passed on to the customer.

He said: “I am not happy with this parasitic service which has turned what should be a free service to encourage cycling into a complicated service that takes any profit off the seller. It is taking advantage of a benefit that is free, charging retailers for the pleasure of slowing down the sales process and making every transaction a nightmare.”

In June, the Department of Transport announced new guidelines that removed the previous cap of £1,000, which was welcomed as a boost for the e-bike sector. But while many workers use an intermediary firm to join up, Snaith claims 50cycles will not do business with them.

He added: “We now recommend that all of our customers approach their employers and we deal directly with them instead. This is much easier than using intermediaries who take up to 15% commission.

“If we do it this way we save a lot of time and we are happy to pass this saving on to the customer by offering them a direct discount on top of the benefits from the government scheme. We just invoice the business as opposed to the employee and the rest is taken care of as a salary sacrifice.”

According to the NHS, illness caused by a lack of physical activity costs the taxpayer around £1 billion a year. Since it was established more than 40,000 employers have used the Cycle to Work programme and 1.6 million commuters have pedalled to their office as a result.

Snaith added: “While we welcome any attempt to encourage people to get out of their cars and use a bike for their commute instead, from a retailers point of view these schemes are a terribly inefficient way of doing business

“Why should we have to be left out of pocket? It’s a baffling state of affairs. A far more efficient service for everyone would be to make electric bikes VAT free and increase the speed limit to 20mph. This action would help us compete with the top European markets such as Germany and Holland.”

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