It’s no secret now that Citi Bike is having financial woes, but New York Senator Charles Schumer has an idea that could help them out. Schumer has proposed an amendment to a tax bill for a Citi Bike commuter tax break. If passed, employees who commute via bike sharing could write off $20 each month as a commuting expense on their tax form, possibly increasing ridership.
Image via Oran Viriyincy
“Bike share programs are an efficient, healthy, and clean form of mass transportation, and they should be treated the same way under the tax code as we treat car and mass transit commuters,” Schumer said in a statement. “It makes no sense for cars, trains, buses, and private bicycles to be covered by this program but not bike shares, and this legislation will fix that.”
Workers with employer-sponsored Citi Bike memberships would qualify for the tax break. The bike sharing tax benefit is similar to the private bicycle commuter tax benefit of $20 per month that was added to the Internal Revenue Service code in 2009. Starting this year, the federal mass transit tax benefit dropped from $245 per month to only $130 in pre-tax dollars to subsidize mass transit costs. Meanwhile, the parking benefit that employers can provide to drivers increased from $245 to $250.
So how could New York’s Citi Bike bicycling sharing scheme be so wildly popular and yet at the same time be in dire financial straits? It’s primarily because most public transportation systems are publicly funded and not expected to make a profit. The for-profit model for mass transit rarely works and Citi Bike is no exception. That’s why Washington, D.C.’s publicly funded Capital Bikeshare is so successful while Citi Bike is struggling.
While the nation’s largest and only privately-financed bike share program continues to flounder, a recent article in The Wall Street Journal reports that experts are bullish on Citi Bike’s future if the system raises its annual membership fees and boosts ridership by tourists. Or Citi Bike could join nearly every other mass transit system in the world and become publicly funded.