Seriously: They bought a lot of expensive machinery to build things, rented and furnished a lot of shops, and hired a lot of people to staff those, and sales didn't grow to to use their production capacity, sales area and staff time.

Their prices for that trace-or-replace service were quite a bit higher than what my insurance agency charges me for my theft insurance. That operation may have lost money, but that's not obvious.

I think that insisting on operating boutique shops around the world was a very costly option. They could have made it much cheaper for them (and convenient for customers) by affiliating with existing bicycle shops when they went worldwide.

I share your worries about the trace-or-replace service. Specifically about the "trace" part of trace-or-replace. Ok, the program is excellent promotion, and did put them on the map. But, tracing stops making economic sense very quickly: Bills rack-up very rapidly when you send a couple of your people in a multi-day hunt in an unknown location.

No kidding on the boutique shops, an expensive street in Covent Garden is super cool to pickup a bike from but running a specialised servicing department from there was clearly commercial suicide. For profligacy this was topped only by a datacentre I was asked to help decommission that was in an Art Deco building on Strand. Next to The Savoy. Overlooking Cleopatra’s Needle and the Thames.

That said, it is a shame that you can’t have specialised bicycle service shops in the centre of London. VanMoof offered a pretty good bespoke experience and my X2 has had a few issues but it’s going quite well four years in. What goes up quickly comes down quickly, I suppose.

In their defense: if the trace efforts succeed in disencouraging thieves (big if), I'd consider it far more valuable than insurance. I'd rather have the bike not stolen than stolen and replaced.