Beijing is planning to pilot government-sponsored bike rentals in a renewed effort to ease the city's gridlocked traffic after private firms retreat from the market due to huge losses.

The pilot program will start first in the city's CBD (central business district) areas in Chaoyang district, with 200 bikes available to rent near subway exits, the Beijing News reported Monday.

A worker arranges bikes for rent near a subway exit in Beijing, July 10, 2011. [Photo/Beijing News]

Commuters will be able to use the bikes for free for half an hour after paying a 300-yuan deposit, which will be returned later. They will have to pay 0.5 yuan for the bikes for between half an hour and one hour and one yuan per hour for using the bikes from one to 48 hours.

The ceiling pay for 24 hours will be 20 yuan. Commuters will not be able to get their deposit back if the bikes are not returned within 48 hours.

The program is being prepared and will be launched soon, the paper citied Chaoyang district's transport administration commission as saying.

Bike rental businesses were first launched in Beijing in 2005, when several private firms took an ambitious plan to make a profit by collecting rent in the new market which had few competitors.

The business peaked during the 2008 Beijing Olympics and then turned into slump with rental spots diminishing and firms bankrupt due to high operating costs and low profit margins.