The rubber meets the pavement in Karlín, where real estate developers are giving a new public bicycle program a trial run.

M2 Real Estate's Charles Butler has set up a dozen automated kiosks at various Prague 8 locations that dispense nearly two dozen bright-yellow bicycles. For a fee, users can rent them for anywhere from a minute to a day, ride them to another kiosk, drop them off and be on their way. Pilot project YELLO, as it is called, is similar to successful efforts in Amsterdam, Berlin and Vienna.

YELLO requires a 300 Kč ($12) registration deposit, which is intended to dissuade vandalism. Free community bicycle programs have been tried in other cities and failed miserably. In Cambridge, England, for example, a 1993 program had to be abandoned when all 300 bicycles were stolen on the first day.

So far, the Karlín effort has racked up more than 70 customers. Butler estimates that as many as 200 people will use the system in its current incarnation. He says that Prague is a good place to peddle the pedal, because bicycle transportation answers some of the city's problems.

"Bicycling hits today's buttons," he says. "It reduces congestion, it's ecologically as good as can be, and it makes people thinner. Those are the main themes of today's life."

The current program will study the cost of operation, taking into account vandalism and maintenance costs.

Karlín was selected because it is a compact, relatively flat area with a mix of residents and workers, according to Butler, who is also the CEO of Homeport, the London-based technology company that created the kiosks.

Homeport wants to expand the project citywide. Ultimately, its goal is to have a station every 275 meters in four directions throughout Prague. The cost of the nearly 500 kiosks needed for expanded coverage is around 30 million Kč.

There are several public and private grants available to finance such a project, but Butler says those are not an income source steady enough to make the project truly viable. YELLO needs to hold its own purse strings, and thus two factors could doom the project.

"First, we need sponsors, which I think we will find," Butler says. "The second is critical — we need the city to let us put advertising on the bikes."

Any advertising on the streets of Prague needs to be approved by City Hall, and that includes advertising on bicycles. Butler is also hoping that the city will waive the fees currently charged for the space taken by the kiosks.

Homeport wants to expand YELLO the same way that wireless Internet hotspots have grown — by individual companies or organizations seeking to install stations for their own benefit.

At 55,000 Kč to sponsor a kiosk for one year, Homeport has had some interested parties. Real Estate Karlín Group agreed to fund two-thirds of the initial operating costs of the pilot program, and Europolis Invest has said it will sponsor another kiosk.

"As a developer, transportation is one of the most important things in a district," says Serge Borenstein, president of Real Estate Karlín Group. Although his company put up the majority of funding for YELLO, Borenstein says it has no direct stake in any earnings from it.