When given a variety of transportation options, people will usually choose the fastest way to make the trip. To encourage people to bicycle in high population density areas, create more direct routes with protected bikeways than if you traveled by car. This will increase the liklihood that you will travel by bike rather than by car. You will still be able to get anywhere you want by car, it will just take you longer and it will be less convenient. This will lower the cost of maintaining transportation infrastructure, replacing less needed parking lots with buildings for businesses or residents that will generate much more taxes to maintain the infrastructure that the city has. For an example of how this works, here's a link to a video about bicycle infrastructure in some cities in the Netherlands. At 2:20 in the video Cor Van Der Klaauw and Hillie Talens explain some reasons why people choose to cycle in the city of Groningen.
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