If 100% of people are using it wrong, your product is terribly designed
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Those racks were fine for a long time, and are still very functional for large groups of people. Every elementary school and fruit packing plant I’ve ever seen has rows of them that are always full to the gills of WalMart bikes. It’s not terribly designed, IMO. It’s great if you need to pack hundreds of cheap bikes in a small space. Some scratching occurs, but most folks riding WalMart bikes aren’t too concerned about out that.
The issue arises when you need to pack a few, nicer bikes with afluent owners into a less small space.
Wave racks can support the same density while allowing a range of bikes to be securely locked.
They do not achieve the same density. Not even close. The rack in the OP can have bikes spaced very close to eachother on both sides. It’s perfect for when the level of care for the bike is low.
For the situation in the OP (ie, not mass bike storage, but a handful of commuters), a wave rack would absolutely be better. It’s more compact, more convenient, and would store more bikes more comfortably when used as poorly as above.