Transport in New Zealand has a significant carbon footprint and congestion is a regular experience for many. Most of our trips are taken by private vehicles, the majority of which are shorter than 5kms in urban areas. To reduce emissions and improve the efficiency of our transport system, we need to think innovatively about alternative ways to get around. Uptake of e-bikes is one example of how our urban mobility is changing, but they are relatively expensive.
Employer e-bike purchase support schemes are helping many more people to purchase e-bikes by addressing the key barrier of the upfront cost. They work through employers negotiating a discount from an e-bike supplier and then providing a wage advance or loan to staff, paid back through salary deductions over a set period.
Important note: Legislation prohibits many public sector organisations from lending money. For these organisations, workplace e-bike schemes need to be adapted to remove the salary advance or loan features. Financing offers through suppliers or payroll deductions directly to suppliers can be alternatives. Each public sector organisation should seek their own legal advice on whether or not they are able to offer a salary advance or loan to their employees.
E-bikes are proving to be a healthier, quicker, cheaper, and lower carbon transport option that appeal to a broad range of people in New Zealand. These schemes are supporting uptake.
Results from organisations that have already rolled them out suggest that once people own their own e-bike, they are revolutionising how they get around.
Here are the views of some of those buying e-bikes through these schemes:
“I haven’t used my car since (buying the e-bike).”
“It’s so great, definitely puts paid to the headwind!”
“I can’t thank ‘my employer’ enough for this initiative.”
“A definite recommend.”
“It’s now my only mode of transport to and from work.”
In addition, the cost and carbon savings are impressive. For example, annual savings for a single e-bike commuter, based on replacing a 12 km each way car commute, are estimated at $900 and nearly one tonne of carbon dioxide emissions.
Check out how Tauranga City Council has seen excellent uptake of e-bikes by their people.
This guide provides organisations with all the basics to make the decision on, and then to implement, an employer e-bike purchase support scheme.
This includes information that helps in:
The guide includes a suite of supporting resources, such as checklists and templates, which facilitate the process (see Support resources below).
This section provides answers to many key questions. Download a printed version [PDF, 144 KB] of the questions and answers.
For participants in a scheme, the key consideration is to have sufficient information on available e-bike options and the opportunity to test ride them during a trial/demo day. E-bikes are encouraging people to cycle who are not comfortable or enthusiastic about conventional cycling.
(a) To batch together employee purchases (or bulk buy) to receive the best deal (discount) from your e-bike supplier. This requires organising trial/demo days and announcing ‘a window’ with an end-date for employees to place their order.
(b) To organise relevant teams within the organization most likely Human Resources, Payroll & Finance – to facilitate a smooth purchase and repayment process. Gaining support from one or more senior managers is key.
(c) To have really clear and engaging communications with employees, from the right level, to initially gain interest and then make the process easy.
Who provides the e-bikes?
The e-bikes are supplied by a single retailer (supplier) that the organisation has chosen to purchase through.
The chosen supplier should be one that can meet the requirements of the managing organisations’ scheme. These requirements typically include offering demo rides/ trial days, a bulk buy discount; good range of models and available stock; and post-purchase support. One further consideration for organisations may be the range of e-bikes a supplier can offer discounts on as part of the deal.
To maximise the bulk buy discount and simplify the contractual arrangement, employees are therefore not free to choose an e-bike from any retailer.
(a) Locations for charging batteries (standard 3-pin sockets)
(b) Expanded parking areas, and
(c) Bike stands and racks suitable for e-bikes.
This section provides all the detail to help you make the decision on, and then to implement, an employer e-bike purchase support scheme.
Use this checklist [PDF, 130 KB] to help you through the process.
Discover and decide
An employer e-bike purchase support scheme involves an organisation facilitating a bulk purchase of e-bikes for its employees (and possibly its own fleet too) at a discounted price. An e-bike supplier is chosen who can meet the needs of the organisation, typically including discounts, ‘Have a go’ sessions, and good support.
Some organisations may also encourage take-up by providing employees with a wage advance or loan (typically up to $2000) towards their e-bike purchase, which they then pay back through automatic deductions from their salary over the course of an agreed period (eg a year). Generally, this option is not available to the core public service. However alternative financing arrangements with suppliers can achieve the same result.
E-bike buyer’s guide(external link) (Consumer.org.nz)
Owning an e-bike offers the benefits of healthier, quicker, cheaper, and low carbon transport. For many e-bike owners, it has become their preferred commute mode, often replacing car use. An employer purchase support scheme reduces the financial barrier of finding several thousand dollars to buy an e-bike.Close
As an organisation, the scheme is a tangible way to support health, wellbeing and sustainability goals. Staff that are more active are typically healthier, so the organisation may benefit from fewer sick days and a more alert workforce. Supporting employees to replace car travel with e-bike use is an effective way for an employer to contribute to reducing carbon dioxide emissions, and congestion.
In terms of benefits for a business case, they can be harder to quantify in financial terms. However, there is substantial evidence showing the health benefits of regular cycling (see Forbes article(external link) for examples). It is reasonable to assume a healthier workforce is a more engaged one and has fewer sick days. In addition, if the bulk buy of e-bikes includes bikes for an organisational fleet, then the savings from buying more in bulk can be used as a benefit – this approach has been used by at least one NZ organisation so far. For many organisations, providing a scheme will support its corporate social responsibility and sustainability objectives.
Above anything else, the main benefit to an employer is likely to be improved morale from employees that appreciate the support to transform their everyday transport choices, which can otherwise be limited, expensive and frustrating.
In summary, the key benefits for an organisation are:
There is the need to administer the scheme, including setting up the financial process, co-ordinating with your chosen supplier and your staff. This guide is designed to ease the administration burden. Typically, the scheme can be run as a mini special project within the Human Resources/People department, involving other teams as required (eg finance, payroll, sustainability). A project sponsor and project champion is needed to drive the project forward.
If there is a financing option used (salary advance or loan), there will either be no or a small direct financial impact to the business. If a wage advance approach is used then there is unlikely to be Fringe Benefit Tax (FBT) implication, providing the advance amount does not exceed $2,000. See relevant IRD information:
Fringe benefit tax(external link) (IRD website)
If an employee loan approach is used, then there will be FBT implications if a preferential interest rate, or no interest, is offered. For example, a $2,000 interest free loan paid back at $80 per fortnight over 25 weeks would cost around $30 FBT.
Fringe benefit tax annual calculator [XLSX, 38 KB]
Providing secure storage facilities for staff to park their bikes is important. Typically, bike parking is something that is already provided by organisations interested in setting up an e-bike scheme, but depending on numbers involved, it may need extending following the scheme roll-out.Close
Several large organisations have implemented this type of scheme.
Tauranga City Council led the way in late 2017. Its scheme resulted in over 50 employees purchasing an e-bike. Of those who participated in a follow-up survey, 58% reported riding to work 4 or 5 days a week. An additional 24% riding 2 or 3 days a week. And 72% of participants reported that they previously used to travel to work primarily by car.
In the terms of carbon and cost, the results from the Tauranga City Council’s survey were very positive. The survey suggested that annual savings for each e-bike commuter, based on replacing a 12 km car commute, were estimated at $900 and nearly one tonne of carbon dioxide emissions.
Case study on the Tauranga City Council experience
We acknowledge Tauranga City Council and its e-bike supplier, Electrify NZ(external link), for sharing information on the scheme.Close
The two key questions to answer before embarking on the scheme, are:
As an employer, you may already have a reasonable understanding of your people’s commute patterns, and the options available to them. Perhaps you already include a commute question in a regular staff survey. If not, now is a good time to find out, and include a question or two about e-bikes as part of that process.Close
No prizes for thinking that summer time is when most people will think about the option of cycling to work. Therefore, preferably, introducing a scheme needs to be aligned with that opportunity.
Allowing sufficient time for setting up the scheme, working with the chosen supplier, promoting to staff and managing the sign-ups, this really means that it’s best to have made a decision to proceed with the scheme sometime between August and November (the earlier the better). This should enable the e-bikes to be available during the summer months (ideally before Christmas).
Bike stores have a major retail sale on ‘Black Friday’ in late November. It is recommended that your offer to employees has finished before this date so stocks are available and discounted prices don’t conflict with that public retail event.Close
A key decision to make is your e-bike supplier. There are important criteria when making that decision. These are outlined below. The criteria are not definitive or mandatory – an organisation will have its own priorities and decide which are of greater importance.
First, the supplier needs to be able and willing to offer a suitable range of e-bikes and offer discounts. The discount will usually be dependent on the number of e-bikes ordered.
The supplier will also need to have an adequate supply of bikes in stock so they can cater for your bulk purchase. For organisations with offices in multiple parts of the country, a supplier should be able to supply bikes in all areas.
Another critical requirement is the willingness to coordinate and run at least one ‘Have a go’ event, giving employees the chance to try out the range of e-bikes on offer. The experience of riding an e-bike is often the decisive factor in the purchasing decision.
To encourage employee sign-up, the offer is best run for a limited time (eg one month after the ‘Have a go’ day). This helps when there is volume-based pricing.
It is also advisable that the supplier offers a full briefing (including safety) to purchasers on collection, and post-purchase support for the first 3-6 months after purchase, including a complementary full service in that period.
And, finally, the supplier needs to offer good support to the organisation during the full process.
The organisation will need to confirm in writing the specific pricing and service details with the supplier as well as the invoicing or financing process. The supplier should also agree to supply information about who has purchased the bikes, so organisations can crosscheck with employee agreements.
To facilitate the selection of an e-bike supplier, we have prepared a checklist that identifies the key considerations when selecting the e-bike supplier. This assists both the employer (organisation) and the supplier.
Summary of the key requirements of e-bike suppliers [PDF, 118 KB]Close
The information above provides the background for developing a proposal. To make it easier we have consolidated the key points into a template proposal. It provides the basis for developing a full proposal, with additional organisation-specific information added as required.
The proposal is most likely to be successful if it gains support from a member of the senior leadership team, who can champion it across the organisation. The proposal itself may be led by any part of the organisation, but involvement of other key teams or managers (eg sustainability, administration, finance, payroll) is recommended.
Canvassing interest from your employees is also worthwhile, to understand indicative demand.
Proposal template [DOCX, 39 KB]Close
The Transport Agency is coordinating a cross-government initiative that raises the profile of e-bike purchase support schemes and makes the process simpler for public sector organisations who want to implement a scheme.Close
Setup and rollout
This requires the lead department to co-ordinate the relevant groups across the organisation. There needs to be general agreement on the roles and key process features.
For those staff who elect to finance the purchase rather than pay outright for the e-bike, the payment flows need to be agreed. There are two main approaches for the employer:
Each organisation should seek its own legal/taxation advice to confirm which option is best suited. (As noted earlier, many public sector organisations are not legally allowed to offer a wage advance or employee loan. Financing offers through the supplier can be an alternative.)
A wage advance involves the employer providing an advance of up to $2,000 into the employees’ bank account, enabling them to pay for the e-bike directly with the e-bike supplier. This is unlikely to be subject to Fringe Benefit Tax (FBT), providing the advance is no more than $2,000. See relevant IRD information:
Fringe benefit tax on low-interest loans(external link) (IRD website)
An employee loan involves the employer paying for the e-bikes on behalf of the employees. If the loan involves a preferential interest rate (eg zero interest) then this is liable for FBT. The preferential interest rate is discretionary, but recommended to incentivise uptake. Typically, roles involved in the employee loan option are:
A calculator for loan repayments, interest and FBT liability is available:
Fringe benefit tax annual calculator [XLSX, 38 KB]
If the wage advance option is used then a clear process needs to be agreed with the supplier (eg through an invoicing arrangement), whereby payment is made by the employer once the employee has confirmed collection of the e-bike. The employee will also need to provide any shortfall payment (eg if the discounted price is $2,250 and the funding provision is $2,000, then the employee needs to provide $250 on collection).
If the loan option (with preferential rate) is used then it is highly recommended that the supplier provide the employer with a list of those who have purchased e-bikes through the arrangement. Alternatively, the employee could provide proof of purchase to the employer. Either way the employer could then follow-up with any loanee employees who have not yet purchased a bike.
The employee sign-up process needs to be agreed. Base it on a simple agreement such as the Employee sign-up agreement template [DOCX, 21 KB].
The agreement defines the following, as a minimum:
The agreement will also cover exceptional circumstances (eg if the employee leaves the organisation prior to paying off the full amount). The employee agreement may need to include a caveat whereby final price is confirmed once total order numbers are known (as a minimum, the agreement should show the price range).
It is advisable that the supplier provides a pro-forma listing the e-bikes available, their pricing, and the discounts offered (including volume-based options if relevant). The employee can then just select their chosen e-bike model, including any preferences (eg colour).
The sign-up process will be open for a certain period after the ‘Have a go’ days (eg one or two months). A limited period is recommended so that employees are encouraged to make a decision, and as the supplier pricing may depend on order volume.
Based on the collated sign-ups, the organisation places the full order with the supplier.
Note: the scheme targets employees, but the organisation could also offer contract staff the opportunity to take part, and also family members of employees. However, these would be based on upfront payment of the full purchase price (less any agreed discount) rather than through a repayment approach.Close
Once the decision to introduce the scheme has been made, then the approach to engaging staff should be discussed and agreed as soon as possible, preferably with the communications team.
The specifics will depend on organisational preferences and capabilities, but several key features are recommended.
As mentioned earlier, holding at least one ‘Have a go’ event with the e-bike suppliers is crucial. This should be timed to enable as many staff as possible to attend.
Prior to the ‘Have-a-go’ event(s), the idea of the e-bike scheme should be socialised and promoted to employees, through appropriate channels. Both printed and online methods are recommended, including the organisation’s intranet and social media staff groups. These should highlight the key benefits of e-bikes, the key features of the scheme, and frequently asked questions. Sharing case studies with first-hand accounts of e-bike purchase is also valuable. The aim will be to inform employees prior to the ‘Have-a-go’ events, so that they are primed to sign-up at or soon after the event.Close
As mentioned above, these are critical. The experience of riding an e-bike is often an eye-opener – it’s rare for the first ride not to be accompanied by a big grin at the end.
Holding these events at, or close to, the workplace and during the working day is best. The employer and supplier need to liaise on the details.
If the scheme is available across multiple work sites, then hold at least one ‘Have a go’ event at each site.
The employees should be able to try out a range of e-bikes to get the right weight, power and fit for them. The supplier will be available to provide advice and answer technical questions. The employer’s scheme manager also should be available to talk about the scheme details. This is a prime opportunity to encourage employees to sign-up, or at least register interest.Close
The sign-up process should be open for a limited period after the ‘Have a go’ event(s). A limited period encourages employees to make a decision. In addition, supplier pricing may depend on order volume.
During this period the employees should complete the sign-up agreement form (on paper or electronically, depending on employer preference), as outlined above.
In the sign-up/agreement form the employee will indicate their e-bike selection (using supplier pro-forma when available). The employee will sign the form to confirm the go ahead, and acceptance of all the conditions (eg monthly repayment amount, payment of any shortfall amount, any price variation depending on the final bulk purchase quantity).
Employee sign-up agreement template [DOCX, 21 KB]Close
There are different ordering approaches, such as the employer collating all orders (recommended) or the employees making individual orders with the supplier.
At the end of the sign-up period, the employer will place the full order with the supplier, including finalising the pricing based on quantity ordered. The supplier may wish to require a deposit at this stage.
The employer (or supplier) then informs the employees that orders have been confirmed, including the final price. This is also a good time to provide information on safety considerations, to supplement the safety briefing which the supplier will provide on pick-up.Close
There are various options around the collection and payment processes.
It is easier for the supplier to liaise directly with the employee when their e-bike is ready for collection. On collection, the employee should have a test ride and the supplier should provide a full briefing, including safety considerations. The supplier should also confirm when to bring in the e-bike for a service (eg after two months).
Where the employer is paying, the employee needs to sign to confirm collection, which the supplier can then pass on to the employer.
On receipt of the pick-up confirmation then the employer can settle the outstanding payment with the supplier.
If this has not already been initiated then the employer can then set-up the monthly salary deduction.Close
The employer should already have been thinking about the potential impact of many more e-bike commuters. Now is the time to make any changes to accommodate them.
Other sections of this Workplace Cycle Guide provide advice on providing for people with bikes at your workplace. For example, health and safety advice and facilities.
The key one will be providing sufficient secure storage space. This may be an opportunity to re-allocate some of your parking space, to accommodate more bike parking. After all, one of the main purposes of the scheme is to reduce commuting by car.
One car parking space should easily accommodate bike racks for six to eight e-bikes. E-bikes are generally slightly larger (wider) than conventional bikes, so that is an additional consideration. See Cycling parking and planning and design guide for more detailed information.
Other considerations are storage space (eg lockers) for bike accessories and clothing, drying area (for clothes), and showers (although most e-bike rides are ‘sweat free’).Close
To support your e-bike purchase scheme, your organisation may want to promote cycle skills training to those taking up the purchase offer. BikeReady is the national cycling education system, and there are qualified providers around the country that can deliver e-bike specific training. For more information, check out www.bikeready.govt.nz(external link).
Organisations only have liability under the Health & Safety at Work Act when the employee is carrying out a task for the organisation (eg riding to a meeting). Commuting is not captured under this Act. However, it is good practice for organisations providing e-bikes through this type of scheme to ensure that its e-bike supplier provides appropriate safe cycling advice (including a full safety briefing) as part of the process.
Further guidance on employer responsibilities is available in the Workplace Cycling Guide Staying safe section.Close
Process checklist [PDF, 130 KB]
Lists all the key steps involved in setting up a purchase support scheme.
Supplier checklist [PDF, 118 KB]
Lists the considerations for employers when selecting the e-bike supplier.
Financing and repayment options comparison [PDF, 119 KB]
Shows the differences between the wage advance and employee loan finance options.
Financing costs calculator [XLSX, 38 KB]
Estimates the finance costs and Fringe Benefit Tax liabilities. (Note: used at the user’s own risk.)
Proposal template [DOCX, 39 KB]
A template for use to seek formal approval for a scheme.
Employee sign-up agreement template [DOCX, 21 KB]
A template for use to sign-up employees to a scheme.