Investment Group Said Close To Acquiring Big-City Bike-Share Programs
Talks are at an advanced stage to put control of the bike-share programs in several of America's biggest cities including Washington DC, Boston, Chicago and New York into the hands of an investment arm of the Equinox fitness group, part of billionaire Steve Ross' New York real-estate giant, Related Companies.
REQX Ventures, which is controlled by the principals of Equinox and Related and invests in businesses related to the two companies' real estate, lifestyle and health and fitness interests, is reportedly negotiating a $40 million acquisition of a majority stake in Portland, OR-based Alta Bicycle Share, which operates the bike-share programs in seven U.S. cities as well as those in Toronto in Canada and Melbourne in Australia*.
As well as its own gyms, Equinox owns the Pure Yoga, Blink Fitness, Soul Cycle and Creative Juice brands.
If consumated, the deal could provide a large cash infusion to Alta's operations, allowing delayed launches of new bike-share programs in Portland, Baltimore and Vancouver to move ahead, and to tackle bike-supply problems that have hampered expansion of the San Francisco, Washington DC, Boston and Chicago systems.
The biggest immediate beneficiary would likely be America's largest bike-share program, New York City's one-year-old Citi Bike. This could result in a doubling of the current 5,850 bicycles in the popular but divisive and money-losing program, which alone among America's big-city bike-share programs is not subsidized by taxpayers.
Reports say the new cash would let Citi Bike complete its original roll-out plan by adding service next Spring to the Long Island City, Williamsburg and Greenpoint districts, which were cut as a consequence of equipment damage caused by Hurricane Sandy. Eventually, service might be expanded to Upper Manhattan, Queens and further into Brooklyn.
Currently only Midtown and lower Manhattan and limited areas of Brooklyn have docking stations.
The deal would also likely lead to the current $95 annual membership being raised to as high as $155 and increases in daily and weekly usage fees. Citi Bike has 96,000 annual members.
Even though Citi Bike operates without any public subsidies, New York City’s Department of Transportation would have to sign off on any deal. Its officials have been pushing Alta for some months to raise new capital to expand the program and to improve its management and often glitchy software as a precondition of it raising prices.
In a written statement to the Wall Street Journal, the mayor’s office said the city was “committed to making New York City's bike share program more reliable and more accessible to neighborhoods across the city. Citi Bike has become part of our public transportation system, and there is a lot riding on its success. We owe it to New Yorkers and to riders to get this right, and make sure we put the system on solid footing for the long-term."
See also: The 16 Best Bike Shares in the World
*Alta Bike Share operates Bay Area Bike Share in San Francisco, Bike Chattanooga, Bike Share Toronto, Capital Bikeshare in Washington D.C, Citi Bike in New York City, Co Go in Columbus, OH, Divvy in Chicago, Hubway in Boston, and Melbourne Bike Share. It had a fleet of 16,700 bikes across those cities as of June and says its riders made more than 1.5 million trips that month covering some 3.5 million miles.