There were schemes like this in Japanese cities 20 years ago!
London bike hire story link here.
They need bigger baskets plus a luggage rack on the back. How easy will it be to find a docking station when you want to get rid of the bike?
The bike hire system in Sakata had bright yellow bikes, which were otherwise normal 'sit up and beg' Japanese bikes. The old Jusco department store opposite the station was the depot. You signed the bike out but it was free! Bikes like those (in other colours) could be bought new for about £50 - the basic, very common school/work commuter bike - they were so cheap, there was no incentive for anyone to steal one (I expect a second hand bike would be practically worthless). All the railway stations had covered bike sheds, not the open racks we have here, so your bike stayed fairly dry and, because they weren't worth stealing, no one ever locked them either.
Biggest problem with the hire bikes was the 'one size fits all' idea, like with the London scheme. After bikes had been on the racks for a while, the seat adjusters seized up and wouldn't work. I made sure I got no.12 every time, as the seat height was just right for me!
I'm not likely to use the London cycle hire scheme though. In Japan, cyclist and pedestrians share the same cycleway/pavement/sidewalk, on a level with the road but separated by raised kerbs, so other traffic can't get into your space. Much safer than cycle lanes that have no real physical barrier. I hope there won't be too many accidents with the London scheme, but driving a car in central London is bad enough if you are not used to the volume of traffic and don't know the route well - I wouldn't want to try it out on a bike.
5 hours ago