On a bright early summer morning in Paris, close to the Champs-Élysées, a US family is setting off for a sightseeing tour using bicycles hired from the city’s Vélib’ bike-share system.

“Wait, wait, I’ve only got one pedal,” calls the mother, as she suddenly realises her mount has a serious fault.

Regular users of Vélib’ bikes will recognise the scene. Since the scheme was launched in 2007, it has been dogged by problems of theft, vandalism and the difficulty of keeping up with the results of heavy use.

But as Paris celebrates the fifth anniversary of the Vélib’ (the lib’ is short for liberty), it can rightly claim that the system has had a significant impact, providing a popular service to tourists and commuters alike and becoming a beacon to other cities seeking to boost bicycle use, reduce pressure on public transport networks and ease urban pollution.

Bertrand Delanoë, the socialist mayor of Paris who introduced the scheme, recently opened a weekend of celebrations to mark the fifth anniversary, which culminated in a mass Vélib’ gathering on the Champs-Élysées.

“I never expected that the Vélib’ would by this point have become a social phenomenon and so valued by those who use it,” he said.

The statistics are impressive. In five years the number of Vélib’ bikes has more than doubled to 23,000, spread around the 1,800 stations that are now a familiar part of the Paris streetscape. The scheme, run by JCDecaux, the outdoor advertising company, has been extended from the core of the city to include the suburbs.

There are 250,000 annual subscribers and between 100,000 and 150,000 daily journeys, including those taken by tourists and others who sign up on a daily or weekly basis for a moderate fee. Each bike makes an average of eight trips a day.

On a more sombre note, six Vélib’ users have died in collisions since the launch, but the city points out that the accident rate has been falling and there were no fatalities in 2011.

Paris was not the first city to adopt a bike-sharing scheme. In the 1960s, a libertarian movement in Amsterdam launched a bike-share scheme after the municipal authorities refused to take up the idea. They repaired abandoned bikes, painted them white and left them on the street for people to use. In 1976, La Rochelle in France introduced 300 “municipal bikes” for shared use.

Other cities experimented with similar operations. Vienna is credited with pioneering mass city-backed schemes such as those now so familiar across Europe. It organised something much like the Amsterdam “white bikes” in 2001. Within three months, most of the 1,000 bicycles had been stolen. But Vienna persisted, launching a paid-for system in 2003, also operated by JCDecaux.

Now there are some 400 bike-share projects in cities all around Europe. London joined the list in 2010. There are similar schemes in China and the trend is spreading to North America, with New York rolling out a system this month.

The European Cyclists’ Federation (ECF) credits the scheme in Barcelona, run by Clear Channel, JCDecaux’s principal rival, as being the top performer in Europe. With only 6,000 bikes, it is much smaller than the system in Paris (the two started at about the same time), but it has a higher rate of usage, scoring about twice as many journeys in relative terms.

“Barcelona is the best,” says Martti Tulenheimo, policy officer for urban mobility at the ECF. “But the importance of Paris is that it was like a lighthouse. It was not the first, but up until the point that Paris joined the club nobody really knew much about bike-share schemes. Because of the cultural importance of Paris, other cities began to ask whether they should do it too.”

There are different funding and operating models in use among the many cities now providing bike-share schemes. Delanoë chose a partnership with the private sector, based on trading prime advertising space on street furniture in return for funding and operating the system.

With a start-up cost of more than €100m, JCDecaux was then hit by an unexpectedly high level of theft and vandalism that led to an 80 per cent replacement rate in the first two years – much worse than in other cities, such as Lyon, where it operates similar systems.

The company and the city say the attrition rates have fallen significantly since then. But, as the US family found, maintenance remains a problem, with many bikes on Vélib’ stands suffering from faults, from flat tyres to broken chains and buckled wheels. JCDecaux carries out 1,500 repairs a day.

Users can also suffer the exasperation of either empty stations with no Vélib’ available for hire, or full stands with nowhere to park. This suggests the operators still struggle to manage the complex flows of demand throughout the day, with the expensive byproduct of having to haul bikes around the city to even out the supply.

JCDecaux does not provide financial figures for the scheme. Jean-Charles Decaux, co-chief executive, said before the anniversary celebrations that it was now operating on a break-even basis. But he admitted that Paris had been “a very costly business in terms of running costs” for his company.

There is also a debate about the way bike-share operations such as the Vélib’ have evolved from, typically, voluntary schemes, to local authority initiatives, to the heavy involvement of the private sector.

In Paris, JCDecaux now has control over large amounts of public space, including big slices of pavement, displacing private vehicle parking.

Last year, the city launched a car-share scheme. Called Autolib’, it is run by Vincent Bolloré, the industrialist, and it plans to have 3,000 electric cars spread across 6,600 recharging stations in the city by 2014.

Maxime Huré, of the Lyon Institute of Political Studies, wrote in a recent article: “Behind the innovations of these two services lies a less well-publicised transformation: the emergence of new private sector players in the shaping of the city.”

This “privatisation” of urban management raises questions about the influence companies have on public policy, he says. Paris, he adds, has been “transformed into a dense jungle of street furniture”, dominated by private sector companies.

“With this model, the occupation of public space leads to public authorities becoming highly dependent on businesses. Furthermore, any change of provider for this type of service represents a major political risk, as the removal of one company’s fixtures and fittings necessarily means tearing up the city.”

But those campaigning for greater use of cycling see the Vélib’ system as a leading example of what can be achieved. Bicycle use in Paris, which the city says accounts for 3 per cent of vehicle traffic, has increased by some 40 per cent since 2007.

The ECF says: “We see the bike-share schemes as a ‘gateway drug’ to more cycling. Places like Paris had very little in terms of bicycling infrastructure before. But [now] they have seen an explosion in bicycling infrastructure and riders.”