Brisbane City Council faced $33m fee to terminate CityCycle contract

Advertising deal means city spared $33m fee for dumping CityCycle scheme after 10 years.

Brisbane City Council would have been slugged up to $33m to terminate the CityCycle project in favour of an e-bike hire scheme had it not retained operator JCDecaux’s lucrative Brisbane advertising deals for the next decade.

The CityCycle scheme is operated by JCDecaux, a French advertising firm, in exchange for advertising rights to panels and billboards across Brisbane, under a two-decade contract that was set to continue until February 2031.

Leaked information reveals early termination of the deal would have cost the council between $19m and $33m.

An alternative offer involved the council paying JCDecaux $44m for a new electric bike scheme.

Just four million trips were taken on CityCycles over 10 years. Picture: David Clark

Either cost would have come on top of the $16m loss recorded by the CityCycle project up to November last year.

Instead, JCDecaux agreed to end the CityCycle scheme and remove all infrastructure at no cost to the council, with its street advertising deal to continue until February 2031.

Public and Active Transport chair Ryan Murphy said the council “weighed up several options” to pursue the e-bike scheme but “paying costs to JCDecaux for the termination of CityCycle was never going to be an option”.

It is understood that the decommissioning of the bicycle scheme is tied to a bus advertising agreement, which allows JCDecaux to sell and display advertising on council buses.

The council will receive a guaranteed annual fee as well as a dedicated media allocation over the 10-year duration of the bus advertising contract.

The council’s rationale for sole sourcing with JCDecaux – which holds transit advertising contracts with Sydney Buses, Adelaide Metro, Yarra Trams and Transperth – stated that the firm was expected to be “the only competitive tender”.

CityCycle was announced by then-mayor Campbell Newman in 2010.

The council declared the end of CityCycles last November, announcing it would replace the JCDecaux bikes with 2000 hireable e-bikes in a bid to profit on the popularity of Lime and Neuron e-scooters.

Mr Murphy said while all contracts had early termination clauses “we didn’t just accept them”.

“As a result of the negotiated outcome, council won’t pay another dollar to JCDecaux, but instead will receive a significant and ongoing revenue stream from advertising,” he said.

CityCycle use has been declining since 2018, with just four million trips taken on CityCycles over 10 years, compared to more than 3.5 million trips taken on e-scooters since November 2018.

The new e-bike scheme will begin mid-year, operating similarly to Neuron and Lime, generating revenue for the city.