As Citi Bike approaches its one year anniversary in May, its bright blue bikes have become as familiar to the New York City landscape as yellow taxis or Yankee caps. But the popular cycle sharing program - the largest in North America - has found itself at somewhat of a crossroads as it struggles with substantial financial woes. Some of the reasons for the cash flow problems include the fact that Citi Bike is entirely privately financed, unlike most other forms of public transportation including other bike share programs that receive public subsidies. Also, the millions of tourists that visit the Big Apple are not using Citi Bike enough to sustain the system. Lastly, there have been widely reported computer glitches and other equipment failures that have turned people off to the bike share system. Things are looking bleak right now - but can Citi Bike be saved, and if so, how? Here are five ways that NYC's bike sharing program might be able to bounce back even stronger in the face of adversity.
Image via Mr. TinDC
When 6,000 Citi Bikes rolled onto the streets Manhattan and Brooklyn for the first time nearly a year ago, former NYC Mayor Michael Bloomberg boasted that “we now have an entirely new transportation network without spending any taxpayer money.” In hindsight, launching the largest bike share program in North America without taxpayer money might not have been such a good idea given that Citi Bike leaders are now seeking tens of millions of dollars to rescue the struggling bike share system. But they shouldn’t expect any help from NYC’s current mayor. Mayor de Blasio maintains that there will not be a bailout. “At this point, city budget money is not on the table,” he said.
But that type of thinking from Mayor de Blasio could be shortsighted because Boston’s experience with its Hubway bike sharing system is an example of how a public-private funding scheme could actually making bike sharing profitable.
According to a story in The Boston Globe, Boston’s Hubway recently began its fourth year in operation with the expectation that the system will continue to turn a profit. Hubway depends on both public and private money from corporate sponsorships and public grant money. “We’re in a very, very solid financial place,” said Nicole Freedman, director of the city’s Boston Bikes program. “We’re in a position to fund expansion.”
INCREASING TOURIST RIDERSHIP
If you dig deeper into Citi Bike’s popularity, you will find that the bike share system has successfully brought in a massive number of annual members who paid the $95 plus tax fee – but casual ridership has not been as great. Annual members get to ride for free for the first 45 minutes before overtime fees kick in. These fees can rise to as much as $9 for every extra 30 minutes that the bike is undocked. However, most annual members don’t go over the time limit. One-time riders pay $9.95 plus tax for a day pass or $25 plus tax for seven-day pass. They are charged overtime fees after a bike has been undocked for more than 30 minutes that are as high as $13 for the first 30 minutes overtime and $12 for every 30 minutes thereafter.
So increasing tourist ridership — especially casual riders who bike past the first 30 minutes — is key to the financial success of Citi Bike.
Citi Bike recently released ridership data that shows that much of its tourist traffic is centered around the Brooklyn Bridge, World Trade Center site and the bottom of Central Park. Could other tourist hot spots benefit from docking stations? Could the city find ways to encourage tourists to take longer rides from one tourist location to another?
Optimistically, the warmer weather should help boost Citi Bike tourist traffic, and early technical problems that discouraged users are being fixed as Alta — the company that manages Citi Bike — has partnered with a new technology and equipment provider 8D after their original partner went bankrupt. 8D has successfully managed bike share programs in Washington, D.C., Boston and London.
The idea of increasing corporate sponsorship has been bandied about as a possible solution to Citi Bike’s funding problem. But part of the problem with this approach is that Citi Bike is basically one big rolling advertisement for Citibank — from the name to the logo to the color scheme. It’s tough to get other sponsors on board when the bike sharing program is so closely affiliated with its major sponsor. Citigroup is paying $41 million over five years to be the bike sharing program’s title sponsor. Mastercard is paying another $6.5 million. Are there other major sponsorship deals to be had? Possibly, but Citi Bike will have to convince new brands that there is room for them (perhaps on bike handlebars or with other physical branding opportunities) as well.
USE EXXONMOBIL SETTLEMENT MONEY
The north Brooklyn neighborhood of Greenpoint is getting $19.5 million from ExxonMobil for environmental remediation and green infrastructure projects as part of a settlement for the oil company’s decades of recklessly spilling up to 30 million gallons of oil in the area and its surrounding waters. The Greenpoint Community Environmental Fund is currently reviewing proposals on how to allocate this money, which could be an opportunity for an expansion of Citi Bike to Greenpoint and even other areas of Brooklyn and Queens. Greenpoint is an area that was originally promised Citi Bike stations, until that plan was dampened – literally – by Hurricane Sandy. If a portion of the GCEF could be set aside to build stations for the area, it could be a win-win for both the bike share program and neighborhood residents – especially in the face of a five week G Train shut down this summer.
Not every community in New York has the advantage of a multi-million dollar grant, so what are far-flung neighborhoods in places like Staten Island and the Bronx to do to get some Citi Bike love? One idea is for these neighborhoods to raise funds independently in exchange for the bike sharing program agreeing to bring docking stations to their part of town. Local governments can get involved in bringing bike sharing to their communities – and Citi Bike doesn’t have to be confined to the five boroughs. Why not expand Citi Bike to New Jersey (although some Jersey cities are adding their own bike sharing programs), New York’s northern and eastern suburbs or even Connecticut? A successful example of regional bike sharing cooperation can be seen in the Greater Washington, D.C. area where Capital Bikeshare started in The District and has since expanded into Arlington and Alexandria, Virginia and Montgomery County, Maryland.