Mobility and Transport

Clean transport, Urban transport

5.2 Cycling subsidies

5.2 Cycling subsidies


Using a subsidy to encourage cycling can take one of two forms; providing a financial benefit for commuters to switch to cycling by paying for km travelled or subsidising the untaxed purchase of equipment through employee schemes.

Considerations for applicability

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Level of cycling

Once suitable cycling infrastructure is in place, potential cyclists may only lack the incentive to use their bike for commuting purposes. This measure is most suitable where accommodations have already been made for cycling within the city (e.g. appropriate infrastructure).

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Urban layout/topography

One of the key topographical influences will be the distance from residential areas to place of work and whether journeys involve long – or steep, hills. Traditionally, commuters have been unlikely to choose to travel long distances by bike, regardless of the incentive. The increasing popularity of electric bikes, however has changed this and financial support up-front for equipment may remove that final barrier in a switch to cycling.

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Subsidies can be applied in ways that benefit certain population groups within the city. For example, commuters may be targeted and accessed through their employer benefits schemes – or students through a student union or representative body. Different demographic groups may also be enticed to cycle if they have access to e-bikes, which could enable groups of the population to travel by bike when they had been previously unable to do so. 

Subsidies generally won’t benefit seasonal population groups like tourists.

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Finance Resources

Subsidies involve the provision of a financial incentive and will, therefore, require that appropriate funds are allocated for the duration of the subsidy period. Other costs will be related to the administration of the subsidy, including management of eligibility and payment of the subsidy (see Time & Human Resources). 

City Administrations may wish to consider bringing local employers on board to contribute to the fund as they will realise benefits in the form of employee health and fewer parking spaces required.

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Time & Human Resources

Subsidies can be managed and administered so that applicants must apply within a window of time; which allows the city administration to limit the amount of time dedicated to managing the scheme.

Administration of the subsidy – and monitoring up-take and eligibility may be reasonably manpower-time consuming at its peak – however, as noted above, the administering body can decide how much time and manpower to devote to the measure.  Manpower within the implementing body can also be limited to the absolute minimum by outsourcing grant administration to an experienced organisation (which will also incur costs).

Measure impact highlight

Public transport, bus and cyclist Modal shift

The use of subsidies aimed at cycling is likely to encourage a modal shift or an increase in cycling frequency for some cyclists. 

Note: An overview of the direct and indirect impacts resulting from correctly implemented cycling measures is available in Challenges that cities face and how cycling can address them

In-depth measure description, case studies and further guidance