Blog

Bicycles are Business: What Research Says About Bicycling’s Economic Benefits

Ed. note: Our Bicycles Are Business series examines local businesses that have decided bicycles, or people arriving on bicycles, make good business sense. Today we take a break from the profiles to provide an overview of the growing body of research examining the economic benefits that bicycles and bicycle infrastructure confer. 

If bicycles are integral to your business, let us know by contacting Max.

Contrary to myth, the implementation of bicycle infrastructure in urban districts has been linked to increased retail sales and safer roads. (photo by Paul Krueger, CC 2.0 License)

There’s a belief found floating around in the ether that the implementation of bicycle infrastructure in a given metro area will result in decreased retail sales, and thus that bicycling is de facto “bad for business.” 1 This is a serious misconception. Studies examining the economic benefits of bicycling abound, and cities embracing bicycling are reaping the benefits of the urban bicycling boom.

Bicyclists Are Serious Shoppers

2012 study of shoppers in New York City’s East Village district – which had recently installed protected bike lanes – found that, per capita per week, cyclists spent the most money at local businesses.

  1. Bicyclists: $168
  2. Pedestrians: $158
  3. Car drivers: $143
  4. Public transit: $111

The “so what?” argument may seem valid here. The East Village is particularly dense, with especially high mode shares of bicycling and walking. So of course that will be represented in total retail sales for the area. But the phenomenon does not exist in a single-neighborhood vacuum; cities in every region across the country are seeing positive results from increased bike infrastructure.

Customers arriving by bicycle were more valuable customers.

Having long been a leader in bicycle-friendliness, Portland may not be a surprising case, but its success is nonetheless noteworthy. In another study from 2012, researcher Kelly Clifton looked at the demographics of folks patronizing different types of businesses in the city. Car drivers spent more money on single visits at supermarkets and restaurants, but people arriving via foot, bicycle, or public transit visited these locations more often. Over a month period, the non-drivers spent more money than the car drivers. Specifically, cyclists spent $75.66 per month at bars, restaurants and convenience stores, while car drivers spent only $68.56.

Similar success stories have been seen in Seattle as well, with one case study showing a 350 percent increase in sales index just two quarters after the installation of bike lanes, with a jump to 400 percent in the following quarter. While such drastic increases may not be solely due to the new bike lanes, they certainly did not have any negative impact upon the business district.

Evidence is mounting that, beyond bolstering bottom lines, encouraging bicycling may help with the larger haul of economic revitalization. The Broad Avenue art district in Memphis, TN was in a state of dilapidation and disrepair. In 2010 it experienced a dramatic volunteer-led turnaround. The “New Face for an Old Broad” event, which demonstrated a reconfigured street with buffered bike lanes protected by diagonal parking and landscaping to slow down traffic and create an improved environment for pedestrians and cyclists, kicked off a resurgence in business for the beleaguered district. The district has continued to grow. Since the 2010 event there has been over $6 million in new private investment, with 37 new business openings, 30 property renovations, rising property values and falling vacancies.

Revenue among restaurants along the street jumped 179% after a road diet swapped vehicle lanes for bike lanes.

Likewise in Fort Worth, TX. When Magnolia Street in the city’s Near Southside district – formerly consisting of two car lanes both ways – was restriped in 2008 with one lane each way dedicated to cyclists, restaurant revenue along the street jumped a combined total of 179 percent. Again, while correlation may not equal direct causation, it is abundantly clear that dedicating a portion of the street to accommodate cyclists has had no negative effects on the economic vibrancy of the businesses along that street.

Accommodating Bicycles Reduces Crashes

The possibility of increased sales isn’t the only boon of bike-friendly infrastructure. As alluded to, the rechanneling of roads to better accommodate cyclists and pedestrians as well as improve traffic flow – termed a “road diet” – often results in significant safety increases across the board. As the Federal Highway Administration states, road diets can provide cyclists with added safety through dedicated bike lanes, increase pedestrian safety, provide on-street parking, increase compliance with speed limits, and reduce many types of crashes.

Studies have shown that biking to work boosts employee productivity, improves health, and increases lifespan. (photo by John Luton, CC 2.0 license)

Studies have shown that biking to work boosts employee productivity, improves health, and increases lifespan. (photo by John Luton, CC 2.0 License)

A 2013 white paper by Libby Thomas of the University of North Carolina’s Pedestrian and Bicycle Information Center illustrates this latter point. Thomas performed a content analysis of six road diet studies done from 2002 to 2013, and came away with some compelling results. Average vehicle crashes may be expected to decline by 29 percent with road diet implementation. For 45 treated sites in Iowa, California and Washington state there was a 47 percent average reduction in crashes on rural highways passing through small urban areas, and a 19 percent average crash reduction in larger urban areas. In 24 treated sites in Michigan the results varied from a nine percent to a 37 percent average reduction in crashes (depending on the methodology used). In addition, a New York City study of 460 treated sites provided pedestrian crash information showing significant reductions in total crashes, injurious and fatal crashes, and pedestrian crashes at segments. These numbers translate into a safer commute for everyone, and thus greater productivity and revenues for businesses.

Biking to Work Makes You Fitter, Happier, and More Productive2

The productivity benefits aren’t just a drop in the bucket. Exercising before work has been shown to increase employee productivity by an average of 15 percent, and employees who regularly bike to work have less sickness-related absences than their non-cycling counterparts. The latter study also concluded that employers could potentially save up to 27 million (around $36.7 million U.S. dollars) if the number of employees cycling to work were to increase by an exceedingly modest one percent.

Want your employees to be less sick and make fewer mistakes? Encourage them to bike to work.

In a study out of Copenhagen, researchers examined more than 30,000 participants over a 14 year period to assess the effect of different forms of physical exercise upon all-cause mortality risk. The results were extremely telling: participants who biked to work showed a 40 percent less likelihood of dying during the course of the study than those who did not.3 Physically fit workers are also more mentally alert and thus make less mistakes. A Swedish study found that fit workers committed 27 percent fewer errors when performing tasks involving concentration and short-term memory, as compared to the performance of their non-fit counterparts. Taken together, it can be seen that encouraging commuting to work by bicycle can have significant positive effects on an employer’s bottom line.

(photo by Paul Krueger, CC 2.0 License)

And the positive effects don’t end with revenues. Employees who commute by bike enjoy specific health benefits that lead to more fulfilling lives. According to the British Medical Association, which performed a study on 10,000 civil servants, cycling just 20 miles per week (a commute of five miles one way, for example, means just two bike commutes per week) reduces the risk of coronary heart disease by a whopping 50 percent as compared to non-cycling employees. Cycling also burns around 300 calories per hour (depending upon grade, speed and other factors). So if that five mile one way commute is roughly 30 minutes long (cycling at 10 mph) and an employee bikes to work three days a week, that’s 3600 calories burned per month – over a pound of fat. Along with being great cardiovascular exercise, biking builds muscle – particularly the quadriceps, hamstrings, glutes and calves – which increases metabolism, resulting in the body’s ability to burn even more calories.

In addition to the physical health benefits, numerous studies have shown that engaging in moderate to rigorous exercise at least a few times per week can lead to a significant reduction in both depression and anxiety. The former study, completed over a period of four years, separated participants who were currently on prescribed SSRI medication for depression into two groups – one engaged in moderate exercise and the other in intense exercise, on treadmill or stationary bike, for a period of three months. The researchers concluded that exercise can be as effective as adding a second medication for major depressive disorder – almost 30 percent of study participants in both groups achieved full remission from their depression, with another 20 percent displaying significant improvement. Another 1994 study followed the physical activity and health of male Harvard graduates over the course of 27 years, finding an inverse relationship between amount of kilocalories burned per week and the risk of developing depression. Men who exercised at least three hours per week were 27 percent less likely to report a depression diagnosis than their non-exercising counterparts.

Conclusion

Businesses that support building bike lanes and actively encourage their employees to bike to work will see monetary and social rewards.

The facts and figures laid out here paint a powerful picture. The multitude of benefits gained from biking to work mean happier, healthier employees who are more punctual and productive, resulting in a more amicable work environment and a positive impact on the bottom line. Building out infrastructure to support bike commuters and other cyclists results in safer and more efficient roads – less crashes and other injuries, more parking for motorists, and greater compliance with traffic laws. This bicycle infrastructure brings with it new customers for businesses, can markedly increase sales,  and can even completely revitalize failing districts. As the bicycle boom continues its spread across the country, it’s a safe bet that those businesses which take advantage of it – through endorsement and support of infrastructure, encouraging employees to commute by bike, and catering to cyclists – will reap the most reward, both now and in the future.

  1. This concept is often nested within assumptions about the correlation between car traffic and commerce.
  2. Ed. note: That was a weird part of OK Computer, wasn’t it?
  3. Ed. note: It was an all-cause mortality risk, so it’s safe to conclude that biking to work reduces your chances of dying by shark attack. Right? Right.

Topics: Biking in Philly, Featured, research

5 comments on “Bicycles are Business: What Research Says About Bicycling’s Economic Benefits

  1. Renee Tollison

    Great article. My town finally built a bicycle/walking trail about 3 miles long. Otherwise not very bike friendly. Hope this is a move in the right direction. Just took up cycling again after 50+years out of the saddle. It’s true you never forget how to ride a bike. Planning my first multi-day tour in the fall.

  2. Jennifer Lowe

    Nothing better than peace of riding your bike on a pathway and there isn’t the hum of car noise blocking the sounds of nature.

  3. Steve Hickerson

    A bike is just a more pleasant way to get way to get around town. Your range may vary, but since I moved from a city where we didn’t even own a car to one where a car is a birthright, my weekend range can be 50-60 miles so a 5 mile trip one way is hardly a sweat breaker. One thing cyclist wore in Washington, DC that made drivers slow and think before running over the cyclist was a T-Shirt that said “Cyclist-One Less Car”.

  4. Geoffrey Morrison

    I bike to and from work, on dates, to exercise my dog, and to social events. If the one way travel exceeds 45 miles, I will consider the car, but prefer to find a route services by local transit. I find that 60 miles a day is quite comfortable, has had an enormous effect on my depression (I used to be chronically depressed), and allows me to spend valuable time with my son and daughters. I used to race competitively, but at 45, I have slowed a bit, and now enjoy my Surly Straggler which does everything a bike should do. It is a capable road bike (if not somewhat heavy), a wonderful gravel road machine, competent on the single track, and a marvel in engineering. The disc brakes cannot be beaten, and I simply love the freedom that the cycling experience affords me.

  5. Tim Brown

    This article got me thinking. First off, it makes total sense that cyclists spend more money in areas that are bike accessible. They have more disposable income than people who use other modes (over the last ten years, I’ve saved at least $15K in transportation costs). That money usually finds itself somewhere other than my retirement account. I can’t tell you how many times I justified a breakfast burrito by telling myself I’d just saved $8 in gas. Second, I’m going to spend that money where I ride, and I ride where there’s safe access. Someone driving a car has more options, and is thus more likely to spread his/her money around. Third, I wonder if any of the studies parsed the demographics more deeply than just comparing mode choice. For instance, does a car-only person with a similar income and background as me spend the same amount of money at the same stores as I do? How does the average income of the cyclists in the studies compare to those of the drivers/walkers/transit riders? Finally, is the money spent on bikeway stores just transferred from other areas, resulting in no net change? Or is it new activity because more people are riding, and so have more disposable income?

Comments are closed.

Search the Blog

Browse the Archives

Stay Connected:

Get our blog
sent to your inbox