August 17, 2009

The price of bicycles in Portland, OR

An interesting article on the invisible hand operating in Portland, Oregon. From the New York Times:
Bicycle Inflation in Paradise?
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.
Hey Robin -- it is called the market. Items with a higher-perceived value are worth more to people. Stores selling these items can get the higher prices so that is what they charge. If my store sold milk for $12/gallon, we would not sell any of it. We sell it for $3.48 and it flies out the door. A bicycle is just another commodity item like a gallon of milk or a pair of socks. Posted by DaveH at August 17, 2009 8:37 PM