Profit from the rise in pedal power

Amid high petrol prices and shrinking incomes, the humble bicycle is enjoying a return to popularity as a cheap and healthy way to get from A to B. Jody Clarke gives three very good reasons why the bike boom is here to stay, and chooses one stock that he believes is going places.

How did you get to work this morning? If it was on a bicycle, you're in good company. Cycle commuting has grown by 91% in London since 2000, with bike sales across Britain up from 3.1 million in 2005 to 3.64 million last year. It's a similar story in America and the rest of Europe, where more people are ditching cars and congested public transport for a cheaper, cleaner and healthier way of getting to work. As Frank van Wijk, an analyst with SNS Securities in Amsterdam, says: "People see traffic jams and packed trams and consider bikes a good alternative and an environmentally friendly way of commuting."

But is the current two-wheel boom sustainable? Three developments suggest it is. First, the success of Paris's free bike scheme has shown other cities that bikes are a feasible form of public transport. Barcelona and Dublin have already copied the scheme, with free bikes spread across a city at regular intervals to dock and pick up. Secondly, if the last oil-price shock taught us anything, it's that when people's wallets protest loudly enough, they will change how they get from A to B. In 1979, distances cycled in Britain rose from a total of 4.6 billion km to 6.4 billion km by 1982, a 39% rise says CTC, the UK's cyclists' organisation. Today's rising bike sales suggest we are seeing a similar trend now.

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Jody Clarke

Jody studied at the University of Limerick and was a senior writer for MoneyWeek. Jody is experienced in interviewing, for example digging into the lives of an ex-M15 agent and quirky business owners who have made millions. Jody’s other areas of expertise include advice on funds, stocks and house prices.