New York City's Bike-Share Program Facing Financial Crunch
Citi Bike, New York City’s bike-share program, needs to raise tens of millions of dollars to meet what the city’s new transportation commissioner, Polly Trottenberg, has called “a number of financial and operational challenges.”
According to a report in the Wall Street Journal, managers at Citi Bike’s operator, Portland, Oregon-based Alta Bicycle Company, don’t believe the program can survive unless it expands into new neighborhoods and becomes more appealing to tourists. The program has proved successful in selling annual memberships — almost 100,000 New Yorkers have signed up at $95 plus tax a year — but for the past five months Citi Bike has been selling only a few thousand of the more lucrative 24-hour passes each week. A 24-hour pass costs $9.95 plus tax and a 7-day one, $25 plus tax.
A harsh winter has discouraged ridership and proved trying for the bikes and docking stations alike. Software glitches and a lingering insurance dispute over damage to equipment during superstorm Sandy has put further strain on the program’s finances. The most significant factor, though, is that tourists have not used Citi Bike as much had been expected, the Journal says. This has led to shortfalls in projected revenues.
The way New Yorkers with annual passes are using the bikes for commuting has also raised costs as more than expected. More has had to be spent than planned on overnight maintenance and on redistributing bikes so docking stations have a supply at all times. Regular riders often complain about docking stations being all-full or all-empty when they are trying to drop off or pick up bikes during commuting hours.
The Journal report said Alta, which is run by the city of Portland's former bicycle planner Mia Birk, had been slow to respond to the operational problems it faced. New Yorkers also complain that the system has been slow to expand beyond Midtown and lower Manhattan and limited parts of Brooklyn.
Citi Bike's revenue comes from corporate sponsorships (Citigroup in its case), advertising and membership and usage fees. Adding new sponsors is said to be proving challenging because of the program’s name is so closely tied to its bank sponsor. Unlike, bike-share programs in other large cities, Citi Bike does not receive local or Federal dollars.
Alta has reportedly approached the new administration of Mayor Bill de Blasio about raising membership and usage fees. When asked at a meeting of the City Council’s transportation committee on March 6 whether Citi Bike could get public dollars, the transport commissioner said it was too soon to say whether private funds could alone fund and expand the program.