Bicycle Inflation in Paradise?

DESCRIPTIONStuart Isett for The New York Times

Portland, Oregon, the current darling of America’s food and environmental writers, is arguably the county’s most bicycle-obsessed city. Bike use was up 28 percent in Portland between 2007 and 2008, and on the Hawthorne Bridge, a main thoroughfare, bikes now make up 20 percent of all vehicles. The New York Times estimated in 2007 that there were 125 bike-related businesses in Portland employing 600 to 800 people. There’s even a store in the city that sells only tricycles.

When I arrived in Portland last month, the first thing I wanted to do was buy a bike and get around the way the locals do. Since I wouldn’t be in town for too long, and it wasn’t clear that I’d be able to take the bike with me when I left, I wanted something extremely cheap.

There were bike shops on every other corner in Southeast Portland, the sort of Brooklyn-ish neighborhood where I was staying. I walked into what looked like the grungiest of them — a store that sold mostly used bikes. There was one employee, and he was heavily tattooed and seemed pretty cool. I completely leveled with him: I didn’t know anything about bikes, really; I could barely change a tire; I was only going to be in town for a little while; and I wondered if he had something cheap that I could use for puttering around town.

I know this is sort of quaint, but the last time I bought a bike, I think I spent $35 and it wasn’t hot. It was a road bike; it had 18 speeds, I think; it squeaked; and it served my needs (biking from my house to school every day) perfectly well. (The bike later died a peaceful death at Burning Man, but that was due to maltreatment, not poor quality.) I was looking for something like that.

The guy in the store asked me how much I wanted to spend.

I sort of stuttered my way and ultimately refused to answer the question because I was embarrassed to say something like “less than a hundred dollars,” for fear of coming off like Borat inspecting the Hummer before buying the ice-cream truck.

Yeah, the bike guy answered, he had something super-cheap for me, an old road bike that they’d fixed up. It wasn’t exactly my size, but it would do. It was a 1991 model, a Trek, I think. It was in good working condition, it had some newer components, and it came with a warranty. I could have it, he said, for $475.

So I went to another store. Same deal, more or less. There was one bike for $275, but it was a girl’s Raleigh from the 1960’s with a wicker basket.

I started looking around the web. At the down-to-earth-sounding Recyclery, another Portland used bike shop — and probably a great one — there are currently 59 used bikes on offer. But 34 of them cost more than $1,000, only eight are priced under $500, and there are none under $300. Even to rent a bike for one week from the Recyclery costs $175 — more than I paid for my weekly rental car the previous time I was in Portland.

At Portland’s Costco, meanwhile — on the outskirts of the city — you can buy a brand-new Schwinn Midtown city bike with Shimano shifters for around $200. But, according to the clerk there, those Schwinns aren’t moving.

I don’t doubt that the Schwinn Midtown is a far inferior bike, from the point of view of a bike connoisseur, to whatever is being sold used in Portland. But you’ve got to love a city whose citizens put a set of moral/aesthetic principles — whether it’s riding a bike with proper disc brakes or refusing to support the Big Box stores — this far above their own financial well-being. And although every city has its bike aficionados, I think that in Portland, most people just buy rebuilt bikes locally because it feels right to do so, not because all these everyday bike riders can really tell the difference between Shimano TX-30 derailleurs and M-970 XTR’s.

Still, what’s up with this bike micro-inflation? Why does there seem to be no market in Portland for used bikes that are actually cheap? Portland is otherwise a pretty cheap city. Beer is cheap. Used clothing is cheap. By major urban standards, housing is cheap too, unless you compare it to the strip-mall-type cities. And certainly there are plenty of people in town who can’t afford to spend $475 — never mind $1,000 — on a bike.

I asked a few people in town about this and got some general sense of agreement and common frustration: cheap bikes are impossible to find around here. The word on the street was that so many people are selling their cars (or taking their cars off the road) and using bikes to commute to work that there just aren’t enough bikes to go around. I also heard about a guy who was actually in the business of bicycle arbitrage; he would immediately snap up the few cheap bikes that would come up on Craigslist, fix them up a bit, put them back up on Craigslist, and make a good profit.

So I started looking at Craigslist — not just in Portland, but in other cities too, and not just at bike prices, but also at car and truck prices. I looked at a wide range of midsized-to-large cities that I thought represented a diversity of urban layouts, bike prevalence, wealth, and so on: Austin, Miami, New York City, Phoenix, Portland, San Francisco, and Seattle.

From each of these cities I collected an extremely basic data set: the asking prices for the 50 most recent cars, trucks, and bikes advertised. I excluded children’s bikes, frame-only bikes, and non-working bikes; I excluded non-working cars and cars that were being sold for parts. I also excluded obvious dealer spam from each. Then I looked at the medians. Here’s what happened:

DESCRIPTION

I didn’t run any serious statistical tests on the data set. This is because there are a few fundamental problems, the largest being that we’re not comparing apples to apples in terms of what’s being sold. That is, we don’t know if the same types of bikes are being sold for more in Seattle than in Phoenix, or if there are different types of bikes being sold in the two markets. The ads also change so frequently that replicating these results might be difficult; and 50 data points might be too small a sample.

Still, whether it’s over/underpricing or just selective selling, what struck me about this informal little analysis was that not one city fell out of line in the inverse order. Where cars were selling for the most, bikes were selling for the least; where cars were selling for the least, bikes were selling for the most; and so on, inversely, in between.

So, it looks like even though there are tons of bikes and bike shops in Portland, there still aren’t enough sellers in town to satisfy the strong demand in this bikers’ paradise. Perhaps in the long run, when enough arbitrageurs start shuffling bikes around the country (and enough arbitrageurs start underpricing each other to drive down their margins), more cheap used bikes will become available in the bike-friendly cities.

In the meantime, if you’re a Portland or Seattle resident thinking of selling your car and going green, maybe you should drive down to Phoenix and ride a bike back. You’d leverage both sides of the inverse relationship — plus there’d be some beautiful scenery along the way.


Tzipporah

Take the train down to Eugene (2 hours south). Here you will find the same bike:people ratio with much better prices and options.

Try Paul's Bicycle Way of Life, or, if you want to resell when you leave, Bike Friday (more expensive, foldable bikes that can fit in a car trunk).

Jeff K

There's a similar phenomenon in somewhat-but-not-quite as bike-obsessed Minneapolis. I suspect someone could make a fortune by driving out to the exurbs, hitting a few garage sales, buying some 1970s/1980s steel-frame road bikes for $10 each, driving back into town and putting them on Craigslist for $200.

I don't really buy the whole idea, though, that a smart consumer spends their $200 on a new Walmart bike instead. People who have done some city biking - snobby hipsters though they may be - know that a solid old road steel frame, with a few modern components, can make for a fast and reliable city bike. I don't think Walmart really sells anything of comparison, and a new equivalent from a more serious bike company will run an easy $1000.

sarahmas

I find the same thing here in Orange County, where people have money to burn and status is very important. My old grad school bike got left out in the rain too much and is rustier than I'd like - I'm not adept enough with road tools to trust myself to fix it if something should break while I'm on it. But my upper limit on a bike price is $200, for something solid and reliable enough to get me to the gym and to tootle around on a bike path once in a while. Can't find it in any of the bike shops here.

My husband bike commutes every day and so he rightfully bought a Specialized for about $800. But my usage is so low that I couldn't justify buying such a nice bike. So I guess I'm stuck with good old Rusty for now.

Owen

When trying to buy a bike in Madison WI I was absolutely shocked at the prices. I almost bought one during the weekend I was in Minneapolis. I simply couldn't understand how so many people could afford to ride bikes when they cost too much, so I waited and I searched. Like most other things, I discovered I could get a bike for nearly free with patience. I ended up getting a great Schwinn for 40 dollars. What happened? Well, spring came around and all the college students left town. I rode the bike for 5 months and sold it for 80 dollars. I chose to do this instead of investing even more time in building my own bike for free. Or I could have waited for one of the annual sales. I discovered during the months I searched for a bike that the in-crowd gets cheap bikes and sells them to the out-crowd. Not only is there always a place you can get a good free bike (or nearly good) in a biking town, but there are always places to get nearly good bikes fixed for nearly free. The problem is you don't live there, you wanted something immediately, and you are probably over 30.

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Phr3dly

Performance sells a single-speed bike that would function just fine for a commuter. It costs, brand new, about $200.

@Erskine, I don't know why you're spending that much on maintenance. My chains last until they start skipping, which is around 5000 miles. Chainrings, bottom brackets, and hubs last easily 20000 miles. in my experience the only thing I regularly replace that costs serious money is tires and tubes.

Others I know who also put serious miles on their bikes have similar experiences.

Molly Newman

There are plenty of ways to get cheap bikes in Portland. Community Cycling Center on Alberta Street regularly has old beater bikes in the sub-$100 range. The bikes are donated, fixed up and then sold cheap. I've seen some pretty swell old Electras there in the last few weeks. (Plus, proceeds go toward their youth education programs... another nice side benefit.)

I proudly ride my mid-'70s Free Spirit trash bike (literally... rescued from the neighbor's trash) all over the place. It makes lots of noise and doesn't always shift particularly well, but I've got mad my-bike-was-cheaper-than-yours bragging rights.

Rick in Raleigh

I would be remiss if I did not mention BikesnobNYC's "PistaDex".

He maintains a running comparison of prices for _used_ Bianchi "Pista" bikes (Italian for 'Track bike'), with data from various cities on CraigsList, compared against the cost of a _new_ Binachi "Pista".

The PistaDex tracks the $'s above/below the _new_ price.

Used Pista's in Portland, Seattle, SF & NYC are typically several hundred dollars over the new cost.

http://bikesnobnyc.blogspot.com/2007/11/bsnyc-fixed-gear-apocalypse-watch.html

Plus, BikeSnobNYC is a really funny writer.

Toby Fee

Yeah the missing piece that several have referred to is the quality of the $200 heap of garbage that you can buy at a big box shop:

Many bicycle riders in America buy a bicycle like they might buy a surfboard: what's the cheapest one? Does it float?

When dealing with a complex steel-and-aluminum machine, this gets problematic pretty fast. Low-end new models have serious drive train, braking, and wheel maintenance problems. If you want to strap bikes to the back of your car and ride it around for twelve hours a year, it's fine for that but not much else. This is the same market that brought you endless poor-quality golf clubs and guitars that won't hold a tune.

It's that disconnect between bargain-basement manufacture of garbage for dilettantes and actual tools for daily use that's confusing at first glance. I'd imagine that you'd notice the same discrepancy when looking at used guitars or used golf clubs. If it makes you more comfortable, try two things that can't be cool: used ukuleles and used power drills. Both sell for much more than one can pay for new items that resemble and briefly perform nearly as well as their higher-quality counterparts.

A lot of accusations get thrown around about cyclists just wanting to look cool on this or that bike. Many's the lazy anthropologist who puts every strange practice off on alien 'culture'. Many here have mentioned the fantastic reliability and low cost of fixed-gear bikes, which are often dismissed as mere fashion accessories.

The full-time bike commuter is as well informed about their simple machine as a car commuter is about his singularly complex bimbo box, and is equally as likely to spend five times as much for something with a bit more 'style.'

One caveat: there may be one other factor: a refurbed used bike from a shop is professionally repaired and often carries some sort of warranty. You're paying American wages for fairly careful repairs by buying a used bike from a shop.

By buying a new bike, you're often paying for Chinese manufacture and maybe 1 hour of American labor in sales and assembly of the bike. It's pretty common to see a shop that has a quality used bike and a similarly specced new bike for prices that seem too close together. I believe it's the cost of labor that explains this.

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jeff

@Andrea Y

Seattle and Portland don't exactly have ideal weather for bicycle transportation. Have you seen the rain here?

DrS

1. Most of the people in Portland would not, despite what they might claim or think, ride a bike to work in Pheonix.
2. The demand for junked bikes is so high in Portland in part because everyone knows a friend who can fix them up.
If you can't fix them or have a friend do it cheaply, you're not in the market to buy a used bike, since a serious tune-up at a shop is almost as expensive as the used bikes.

hop

Bikes are a hot commodity in Portland. You may also consider that there is a lot of mountain biking in the area and those bikes are more expensive than commuters.

If you hop over the Cascade range to Bend, OR, with a huge mountain biking community, the average bike is probably full suspension and much more expensive.

http://bend.craigslist.org/bik/

Brad

The big box bikes weigh around 50 lbs where a nice $500 bike will weigh in around 35. I mountain bike and I can tear a Schwinn to bits within 10 miles of the trailhead. After 3 years and about 3000 miles my bike rides great with tune ups and tires once a season.

I assume in the commuting world is simmilar (rough on the bike in shear milage). A higher quality bike will get you better shifter response, lighter more manuverable frame, and wheels that stay true for more than 100 miles.

I do feel that bike prices are higher in general this year. According to my local shop, the reason for the price hike in the 2009 season is the aluminum prices for the frames as opposed to steel frames of lower end bikes. Maybe it is regional but my LBS sells entry level Trek commuters for $350 new.

Tappen

I remember a book by Trevanian where someone was making a fortune selling pre-bashed Volvos because the only identifiable advantage to explain the price of a Volvo was its durability. Everyone wanted to show they were using the car properly.

Maybe someone will start buying Costco bikes, artificially weather them and remove any obvious identifying marks, then resell them as used and cool? Wasn't there a case a few years ago where an antique chair was "created" by hanging it from a rope over a cliff by the ocean for a few weeks?

bykful

At a once-well-respected bike shop in Seattle, the employees lived by and touted a fairly simple rule: "Never pay less than $500 for a bike or more than $500 for a car". My vehicle infatuation of 3 years, a VW van named Rocinante, was $500, and puts in 5000+ miles of US SW travel every winter.
I commuted 12,000+ miles by bike every year in Seattle[god I was in great shape then]. With considerate maintenance by myself every month, the only replacements on my bike every year were brake pads and chains. Every 2 years were cogsets and tires, sometimes bearings and cables. When I sold my commuter before I left Seattle, it had almost 40,000 miles on it, including the original handbuilt wheels.

Chas

Joe Doebele hits it out of the park: there are plenty of great new bikes available for around $200 to $300 at a real bike shop (forget Costco) where the staff will make sure it fits and can service it, too. I've bought new bikes for each of my kids over the last few years from a local bike co. Bike quality continues to rise even as the price has dropped over the years. Don't give up your search - broaden it!

Matt

I just pulled up the Portland Craigslist and found a half dozen ridable bikes posted in the last two days for around $100. Sure, they're not great, but they would definitely get you around.

It didn't really seem different in terms of content from the Austin Craigslist...

Erik H

How often you need to replace parts is determined by many things, # of miles is only part of the equation. If you are running 10 speed clusters, chains do need to be replaced every 1-2k miles. The cheapest part on a bike to replace is the chain, because if the chain is worn the chainrings and cassette wear out MUCH quicker. A $50 chain a few times a year is much cheaper than a $3-500 cassette every year.

Keep your bikes clean and working properly, it will be cheaper in the long run (and quieter).

Erik

FWIW a sub-$200 Walmart/Costco bike is designed to be sold, ridden a handful of times, and then rot in a garage for years until it is sold to some sucker at a a garage sale or just thrown out. You also have no idea whether the person who assembled it had any idea what they were doing. Assuming they even put it together correctly and safely, the chances are pretty small they they know how to adjust or tune everything that needs adjusting or tuning.

JoshD

Just bought a new bike for $225 at Missing Link, at the intersection of Fremont St. and 71st. It's a KHS, won't get me any dates in a hipster bar but rides like a charm.

Mark S.

Regarding the original question cars vs bicycle inflation.
Isn't there some type of economic principle that stipulates that there must be a critical mass of buyers and sellers for a market to even exist. Since Portland has so much biking, there must be all price tiers available somewhere. If there was an inverse inflation of cars and bikes what would happen in NYC where parking and driving is near impossible ? Do they give away cars there ? Do people pay you to take their car away ? They should, they'd be saving money.
I have noticed that biking is way more expensive than it used to be when it was still a niche thing. Today most bikers are leisure recreational but I would expect prices to drop when it gets to be a real commuting option.

Interesting data in this census report on which cities have the most bike commuters are the prices highest there too ?
http://www.ci.minneapolis.mn.us/bicycles/Census2007Report.pdf

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