How Lime squeezed out the Santander bike

It was a Tuesday morning in late May, and transport secretary Heidi Alexander was going to miss cabinet. Her train hadn’t arrived, and the clock was ticking ever closer to the meeting’s 9.30am starting time. “I could either call an Uber — but I wasn’t entirely sure that I would get through London traffic — or I could jump on a Lime bike. And so that’s what I did,” she recalled at a parliamentary reception a couple of weeks ago.

A cabinet minister essentially endorsing their product was the ultimate PR coup for Lime; one that has come amid months of similar victories for the increasingly ascendant firm. From Timothée Chalamet riding one onto the red carpet at a recent premiere to the England cricket team disembarking their traffic-laden bus and using them to breeze to the Oval cricket ground (with time to spare), Lime has become a behemoth in the capital. In London alone, over 16mn people used a Lime bike during commuter hours in 2024, and 4.3mn different people have used one since they first launched here.

But amidst all the Lime hysteria, it’s easy to forget that until recently, the biggest cycling rental service in London wasn’t green but crimson, and before that, blue. 15 years ago, TfL and City Hall launched their own scheme — now known as the Santander Cycle Hire scheme but originally decked out in Barclays blue and known as Boris Bikes.

For over a decade, the bikes were the king of London cycling, the go-to choice for those wanting to nip about the capital on two wheels. But over the past few years, Santander Cycles have been thoroughly deposed by Lime, with its rider numbers stagnating. So where did things go so wrong? The story of how that happened is one of policy failures and technology, infighting and lobbying, and has seen London councils pocketing millions.

First stop Ealing — next, the whole city

It’s 2018, and Julian Bell, the leader of Ealing council, is at an impasse. Ever since the City Hall scheme first launched under then-mayor Boris Johnson in 2010, he had begged the City Hall to expand the scheme to his borough. By local government standards, Bell was basically a cycling extremist. One of the only council leaders at the time who was a daily cyclist himself, he had a vision for an active travel revolution in Ealing. But his pleas for TfL rental bikes had been rebuffed by the mayor every time; the crimson docking stations never made it past Shepherd’s Bush.

Then came an opportunity. E-bike start-up Lime, founded just the year before in California, was launching in the capital and it was looking for boroughs to partner with. Ealing was their first main target, and in 2018 became the first borough to host the company’s fleet of bikes. “In some respects, they were targeting those outer London boroughs, like ours, that didn't have the Santander bikes,” explains Bell. It likely helped that he was chair of transport and environment at London Councils, a group that both represents and helps shape the policy of all of the city’s 32 boroughs (and the City of London). Ealing was soon followed by its neighbour Brent, and subsequently Islington and Camden, forming a little north-by-northwest bubble that would become the e-bike start-up’s first London testbed.

Back at City Hall, TfL’s own cycle hire scheme, while popular, was stuck. After first launching in limited parts of Central London, it had spread across the capital, even reaching Hackney and the Olympic Park in 2012. But there was a problem. “At 8:30am in Hackney, you couldn’t get a Santander bike because all the docks were empty. And at Waterloo, you couldn’t park your bike because all the docks were full,” explains Simon Munk, head of the London Cycling Campaign, a 12,000-member-strong lobbying group that has become increasingly influential in shaping the city’s cycling policy. 

Initially, TfL had hoped the scheme would be used for a mixture of reasons both local (going to the shops or the pub) and citywide (going to work), but in reality, it was mostly being used for commutes into Central London. This resulted in the constant imbalance of bikes, which came with the huge logistical cost of packing bikes up in a busy location and hauling them over to a quiet one. It didn’t help that the infrastructure was eye-wateringly expensive to build — as much as £200,000 per new docking station. “So there was a point at which I think TfL realised that expanding the scheme was going to become ever more exponentially expensive, because the more you expanded, the more docks and the more rebalancing you're going to need,” Munk continues. “And that completely blew the model at that point.”

Meanwhile, Lime was only getting bigger. Part of the reason why the company has managed to be quite so dominant in London is precisely because, at least in governing terms, London isn’t really one city at all: it’s 33 haphazardly stitched together towns. Although City Hall increasingly has control over some aspects of citywide policy, a disproportionate amount of day-to-day power (compared to other UK cities at least) sits with local councils — and Lime has been brutally efficient in targeting them. At first the deals struck between the company and the boroughs were simple: Memorandums of Understanding, where the firm would promise to follow some basic rules, like sharing data on active travel or in a few boroughs creating restrictions on where you can park your bike, in exchange for access to the roads.

For the councils, this made sense. Most had targets for increasing the number of residents walking and cycling in their borough — and for those outside Central London, letting a company like Lime set-up shop was the cheapest way to hit those targets. “The infrastructure for a docked TfL station is vastly more expensive than the infrastructure to install a five meter or 10 meter cycle hire bay,” as one London council staffer explained it. 

Lime arrived in more and more local authorities, outstripping the 11 that the Santander Cycles operate in (last year, the company announced that it now covered 17 boroughs). And unlike Santander, it would service every inch of them, rather than just having one or two stations — meaning that areas without the tube, particularly in South and East London, had a faster alternative to buses or national rail services. Lime also flooded the streets of London in far more bikes than TfL ever could — their current fleet of at least 20,000 bikes (but likely many more) far outstrips the 12,000 Santander Cycles on the streets today.

But the real race was sparked by the pandemic. In 2022, as lockdowns were slowly lifting, London saw a cycling explosion; it was Lime’s best year in the capital since its launch. It was also TfL’s — a record 11 million people rented Santander Cycles that year. Since then, cycling has only increased in popularity, with 1.3 million cycle journeys now made in London each day. Lime has continued to see growth in usage. “A few weeks ago, we did over 1 million trips in a single day globally. When you look at the per city breakdown, London contributed the highest number of trips,” says Hal Stevenson, director of UK and Ireland policy for Lime. “London is really at the forefront of the growth that's being delivered by Lime globally.” 

But while 2022 marked the start of something new for Lime in London, for Santander Cycles it was an ending. Since that year, the scheme has seen an unprecedented drop in usage. In 2023, the number of Santander Cycle rentals dropped by a third, resulting in a ten year low, and have stayed pretty flat since. 

“Incoherence and infighting”

Technologically, Lime has a huge advantage. “There are lots of differences between the docked Santander hire scheme and dockless providers like Lime. And the words docked and dockless probably give away the key issue,” explains Munk. Simply put, it’s much more convenient to find a bike within walking distance and ride it directly to where you want to go than to be forced to find a nearby docking station to both start and end your ride. Then there’s the fact it’s electric, meaning you can travel further, with much less effort, than a normal bike. Fitness is no longer an issue: “E-bikes are game changers for unlocking cycling for a dramatically wider range of people,” Munk says.

Meanwhile, Santander Cycles has done little to adapt at the same pace. TfL, as Munk puts it, has been “scrambling to electrify their fleet”, but as of last summer this meant adding a mere 2,000 electrified bikes to its fleet (less than a tenth of the number Lime has). This all comes down, of course, to budget: the travel authority has been hobbled in its progress by limited funds, whereas Lime has raised well over $1.5bn dollars from venture capital firms over its multiple funding rounds.

Put simply, TfL can’t ban the firm — that power lies with the councils themselves — and they can’t outspend it. But for those working in cycling, this was all made worse by a sense of competing priorities among those making the decisions. “Within TfL, there is a clear level of incoherence and infighting. Some bits of TfL have the view that every person who starts cycling is a person [who] isn't on the bus — paying TfL bus revenues and driving up ridership,” explains Munk.

Frankly, not much has changed about the Santander Cycles scheme since it first launched. Part of that failure lies not with TfL, but with Serco, the private firm brought in to manage the scheme, who have avoided changing anything to compete with the scheme’s dockless rivals. Their outsourcing contract is up for renewal this year and, despite the clear commercial restrictions on speaking out, Will Norman, the mayor’s walking and cycling commissioner, made clear that City Hall weren’t happy with how things are. “We'll be looking at some of the bits which really do need modernising, particularly around improving the app and the payment processes,” he admitted. “I think there are clear areas where we would love to see new stuff.”

More fundamentally, Lime is a money-spinner — just not for TfL. As the company and its profits in the capital have grown, and after the arrival of competitors like Human Forest, the early deals struck by Lime have led to formal contracts, with councils demanding a slice of the revenue. These can be lucrative: a two-year contract back in 2023 saw e-bike firms Human Forest and Lime pay Camden Council around £1mn in total. 

But those payments are a drop in the water compared to the money these companies can make. Hackney, who is currently tendering a new contract for e-bike firms to operate in the borough, estimate it will be worth some £93mn over five years to whichever firm wins. At times, such deals have been mired in scandal. Back in 2022, Lime won a controversial bid to operate in Hackney, in a process insiders said “stank” with a “a strong sense the rules were not being followed and the winner was predestined”. Not long afterwards, a charity run by the Hackney councillor cabinet member in charge of environment and transport, Mete Coban, entered a formal partnership with Lime that saw the charity’s campaigns emblazoned on the baskets of the firm's bright green bikes (Coban has denied any wrongdoing).

How do you solve a problem like poor dockless e-bike parking?

As the number of Lime bikes on London streets have gone up, a new problem has emerged: parking. Last year, photos of thousands of Lime bikes crowded around the starting route of the Hackney Half marathon went viral, and since then, issues of streets blocked by hordes of poorly parked bikes have become a staple. “There is no regulation in this space. There are deals being made with different councils in different ways with different things,” says Norman. “But even then, there are still no actual powers to enforce anything.” 

Council staff, who had been drowning in a deluge of complaints about poorly parked Lime bikes, had almost no way of forcing the firm or any of its competitors to do better — their Memorandums of Understanding weren’t exactly acts of parliament. They had to get creative. Some, like Brent, one of Lime’s early backers, went to the press — threatening in national newspapers to kick all e-bike firms out of the borough. Others, like Westminster, started impounding Lime bikes.

Eventually, the pressure paid off. In January, Lime announced a new plan to invest £20mn into London, £18mn of which would go towards new parking spaces and growing its team of staff that collect and move around bikes, as the firm fully pivoted from the “park anywhere” policy that won it so much popularity in the first place. “Councils are forcing them to dock, which essentially makes them like the Santander scheme,” a senior council insider told me. “But people are so used to using them at this point that they’re willing to use Lime’s docking station.”

And back at City Hall and TfL, though they’d be loath to admit it, there’s a sense of surrendering to the dominance of firms like Lime. Their main priority is using the government’s upcoming devolution bill to force the company to negotiate centrally with City Hall rather than with individual councils. Norman insists that the Santander cycle scheme is still “incredibly popular and has a role to play” in cycling provision, but says there are no plans to extend it. Meanwhile, Lime is in negotiations to head even further out to Croydon. “When TfL launched Santander Cycles back in 2010, there wasn’t a private sector market for this stuff, so the public sector had to make one,” Norman tells me. “And the growth in dockless bikes is undoubtedly fuelled by that.” I can't help but think of the $140m operating profit posted by Lime in 2024, and wonder how much money City Hall may have lost by failing to cash-in on the market they created.