The bank initially agreed to provide £25m of sponsorship in return for exclusive naming rights until 2015, the deal was later extended by three years with the bank promising a further £25m.
At least £1.57m has since been deducted from the total sponsorship sum as a result of the scheme failing to meet performance targets.
The bank will end its sponsorship in 2015.
Transport for London has sought to play down the development, insisting that “the current sponsorship deal with Barclays ends” despite the previously announced 3-year extension.
Graeme Craig, Director of Commercial Development, Graeme Craig, said the hire scheme would “become part of a much wider and larger cycling sponsorship offer encompassing Cycle Hire and the major new commitments made in the Mayor’s Cycling Vision – new flagship segregated routes through the heart of London, new Quietway backstreet routes, along with cycle training and potentially other forms of active travel.”
Mr Craig added that TfL would “seek new commercial partners to add significant sponsorship income to the £913 million already devoted to cycling.”
In recent months ridership and hire numbers have plummeted, in part because of Mayor Boris Johnson’s decision to double membership and access fees in an unsuccessful attempt to plug the loss-making scheme’s finances.
Internal TfL polling shows that customer dissatisfaction with the increase was directly linked to a perception that the bank’s involvement meant the scheme raised money for the capital.
This perception was fuelled by TfL’s determination to ensure the bank benefited from high levels of taxpayer funded PR while downplaying and ignoring the role of London’s boroughs in funding the scheme.
TfL has repeatedly sought to avoid scrutiny of its dealings with the bank, shrouding the sponsorship contract in a secrecy clause and refusing to answer a series of Freedom of Information requests for financial data.
It eventually published the sponsorship contract after Mayor Johnson agreed to implement a wide-ranging London Assembly report aimed at boosting transparency at City Hall and its agencies.
An extension of the scheme into parts of South West London is due to go live next week.
Commenting on the bank’s withdrawal from the scheme, Liberal Democrat London Assembly Member Caroline Pidgeon said: “Barclays have received immense benefits from the publicity given to the cycle hire scheme in its early years, but now that its performance is looking shaky they appear to be bailing out.”
“Fundamental questions have to be asked as to how such a one sided deal was ever struck between Transport for London and Barclays.”
Sadiq Khan MP, Labour’s Shadow London Minister, said: “Earlier this week we heard usage of London hire bikes has plummeted by a third after Boris Johnson hiked fares, and now reports that Barclays have pulled their funding of the scheme from 2015.
“This is yet another example of the Mayor’s incompetent handling of London’s vital transport networks. Londoners are suffering the consequences of having a part-time Mayor more interested in becoming the Leader of the Tory party than making commuting easier.”
Labour’s Transport spokeswoman on the Assembly, Val Shawcross AM, said: “Back in 2011 the Mayor and TfL announced this sponsorship would be extended to 2018, yet now we learn it will end in 2015.
“When looking for a new sponsor the Mayor must be completely open about the process. This scheme has the potential to be much more successful, but so far this hasn’t happened.
“The bike hire scheme in Paris for example generates a small profit for the city, whereas Boris’ scheme requires subsidy. Let’s hope he learns from the catalogue of failures and error to date and gets a good deal for Londoners this time round.”
There was support for the Mayor and Barclays from Conservative Member Richard Tracey who said the bank “have been a very good sponsor of a fantastic cycle hire scheme.”
He added: “Nevertheless the chance to work with a new sponsor is a great opportunity to expand this popular scheme even further to other parts of London. Cracking sponsorship is the key to bringing private sector funding into London’s public transport. TfL must seize that chance.”
