NYC Subsidizes Lightly-Used Ferries. Why Not Hugely Popular Bike-Share?

The Wall Street Journal reports that Citi Bike is in the red, needing “tens of millions of dollars” to keep running.

Photo: Dave Winer/Flickr

The de Blasio administration hopes that private money will be found to rescue Alta Bicycle Share, the company that operates Citi Bike, which is the only large bike-share system in the country not to get public funds.

Other than user fees, the big chunk of revenue for Citi Bike comes from Citibank, which agreed to pay $41 million over a five-year sponsorship contract. MasterCard kicked in $6.5 million as well. It’s unclear how much of that $47.5 million is left. City Council Transportation Chair Ydanis Rodriguez intends to introduce legislation forcing Citi Bike to open its books, the Journal reports.

In order to get out of the hole, Alta says that it needs to attract more tourists and expand into new neighborhoods. It also wants to increase the program’s rates.

But a $95 annual membership is already a barrier for many New Yorkers. Even after offering $60 annual passes to NYCHA residents, only a few hundred of the system’s tens of thousands of annual members live in NYCHA housing.

Aside from the cost, Citi Bike stations are mostly in affluent neighborhoods. An expansion model that focuses only on attracting more tourists would mean coverage on the Upper East Side and Upper West Side, but no stations for Elmhurst, Corona, or Kingsbridge.

Alta is also seeking additional sponsorships. Some suggest that Citibank should step up its contribution. Arguably Citibank has already gotten sufficient return on its $41 million that it would not be unreasonable to ask for more. But the folks at Citibank may be less chummy with Mayor de Blasio than they were with finance industry veteran Bloomberg.

The Journal reports that Alta isn’t seeking city subsidies, but there is a case to be made for public dollars, especially if they are invested in ways to make the program accessible to more communities.

After all, the city subsidizes the East River Ferry, which averages 3,200 daily riders, but not Citi Bike, which was averaging 35,000 daily riders in November and consistently exceeded 10,000 daily rides in the winter. The approximately $2.5 million that goes to ferries could benefit more people if it was spent to bolster Citi Bike and expand it into working class neighborhoods.

But that likely won’t be enough to expand into lower-income areas, which would also mean working to keep annual membership costs low.

The de Blasio administration must work to solidify the bike-share system and push Alta to serve a more diverse demographic. Citi Bike’s sponsorship is only five years long, and the city must be prepared for any eventuality.

Perhaps public funds are in order. It’s a discussion worth having.

Otherwise, de Blasio could ask Mike Bloomberg if he wouldn’t mind cutting a check. Then we can all ride around on BloomieBikes.

  • Peter

    Those numbers are meaningless. You need to look at density. The UWS and UES are far more dense that Queens, and they’re adjacent to the existing coverage area. Citibike should expand to Queens (hell, it should expand to SI!), but this isn’t the right argument.

  • Andrew

    All the improvements in the world on the energy front won’t reduce the sheer space that cars consume.

    I don’t ride a bicycle myself, but I think you’ll find that a lot of people here have improved their well being by riding bicycles. There’s nothing stone-age about implementing programs and policies that conserve space.

  • izengabe

    Expanding the federal tax credit to bike shares and making purchasing of annual Citibike passes available through programs like Transit Check and WageWorks could definitely expand the number of people buying Annual Passes. If people see buying a Citibike annual pass with pre-tax dollars as an employee benefit you could have more casual users join the program. Having that $95 annual fee offset with a $30 or $40 tax savings would definitely more people into the program and make more money for Citibike.

  • izengabe

    Also keep in mind that Citibike is not only not subsidized by the City, it is actually taxed by both the City and State. Purchasing Citibike passes is subject to both NYC and NYS sales tax. So not only is the City and State not giving any money to Citibike, they are actually taxing them and making a profit off of it! A simple solution to the City subsidy for Citibike dilemma would be to have the City simple spend all the revenue they generate off of taxing Citibike purchases on improving the Citibike system.

  • Daniel

    I dunno. Their tires look pretty sturdy. My tires are featherweights in comparison and I haven’t had a flat on my commuter bike in the last 1000 miles + I can go a month easy without topping off the tires (I’m not trying to win speed records, just avoid pinch flats). After this winter I could see more chains than tubes being replaced!

  • Joe R.

    The thing is when we’re talking about 6000 bikes even if on average each tire needs topping off monthly, that’s ~400 bikes a day which come in just because the tire pressure is too low. If each tire flats only once a year, Citibike is repairing ~33 flat tires daily. ( 6000 bikes x 2 tires each divided by 365 ).

    I used to flat weekly before I got airless tires and this was with a conscious effort on my part to avoid road debris. Even if the tires of the Citibikes are sturdier, they’re getting a lot of use, so I would say one flat a year is very optimistic. It wouldn’t surprise me if the bikes flatted once a month on average. Once tire pressure gets too low it’s difficult to avoid pinch flats.

    The larger point though isn’t how often the tires flat or need air. Rather, it’s that a viable solution exists to avoid tire maintenance altogether. Airless tires typically cost no more than air tires, and last 2-3 times as long. The rim size on Citibikes is actually amenable to using the better airless tires which use the high-rebound elastometer. Although those aren’t available in the 700×20 size I use on my bike, I’ve heard they overcome the two main issues with airless tires-rougher ride, and higher rolling resistance. That said, my tires which use regular polyurethane only ride slightly rougher than air tires, and they’re ~1.5 to 2 mph slower. I’m a speed demon though, and notice everything which slows me down, including winter clothes. A typical utility bike user probably wouldn’t even notice a difference between my bike and the same bike with air tires as far as speed goes. And as I said earlier, the airless tires available for the size tires on Citibikes won’t even have a speed or ride quality penalty.

    Yeah, the bikes should have had an enclosed chain. That’s another maintenance headache which could be all but eliminated with design changes.

  • Larry Littlefield

    I’d like to see all the bike shops on the NYC bike map be asked to send copies of their state sales tax forms to NYC DOT, with a promise of individual anonymity. DOT could add them up and calculate the minimum city tax revenue collected from cyclists (bicycles are sold elsewhere as well).

    A sign could then be placed on the ferries: this ride is subsidized by taxes on bicycles.

  • Ian Turner

    I hope you’re aware that “It’s stupid” isn’t an argument.

  • Jonathan

    Alta says it needs to attract more tourists, which is code for saying that it is losing money on the annual membership. How does this worthy initiative help the program attract more tourists?

  • nycbikecommuter

    I ride my bike to the East River Ferry in the morning so I get to work faster, less tired and less sweaty, then pedal all the way home in the afternoon. The ferries between 8 and 9 am are pretty much full, lost of people standing. Ferries are a great alternative for those who live near.

  • TeaPartyCitizen

    50% of Los Angeles is either a road for cars or a parking lot for cars. They should call it slab city.

  • Sfgeoninja

    The decision not to use public money on Citi Bike always struck me as more ideological than practical. If Bloomberg hadn’t been Mayor at the time, do you really think it’d have played out the same way?

    Strictly from an operational efficiency standpoint, it makes more sense to have Citi Bike run by a public sector entity, perhaps a new agency of the MTA.

    Right now there is little to no correlation between subway/bus stations and the Citi Bike docking stations. This is an egregious design flaw of the system. As soon as you get off the subway, you should have a docking station immediately within your field of vision. I shouldn’t have to cross the street, round the corner, or use an app to find a bike. Isn’t the whole point of Citi Bike to encourage linked trips with transit and extend the subway and bus system’s reach?

  • Anon2012_2014

    The program is poorly designed because of the high annual membership cost. Rather than paying $90 bucks on a bike, why not buy a cheap bike for $200 and then you get to keep it with you. Or instead allow users to rent one time for say $5 bucks for 30 minutes. There is no value for the tourist. They go to bike hawkers in the streets near the parks who clearly have no work visas and are working on commission.

    Further, the bikes are the heaviest tanks on the street and there are no helmets.

    Citibike = Fail. Try harder next time after the bankruptcy. How much was given to this for profit company to run it?

  • Bolwerk

    Because you maybe don’t want to keep it with you? You have to worry about it being stolen? Storing it in public is difficult sometimes?

    $90 seems pretty reasonable to me.

  • Guest

    That’s not feasible given the way our subway stations exit on to the street. Additionally, the stations were located by public consensus, which should have included anyone who foresaw themselves as using them in conjunction with the subway

  • Laddiemon

    Perhaps it is not related to popularity, but mismanagement of the program. For example, Alta Bicycle Share, the company that runs New York’s bike-share, has told Bixi (the company contracted for the service) it wants $11 million Canadian in damages for software delays. I imagine Alta has spent much for fixing things that were supposed to work and is now suing to recover the money.

  • boblaw

    It needs to be paid by credit card so that you have someone on the hook if the bike disappears or ends up in the Hudson. Otherwise, you could just steal a crapton of bikes for $2.50 a piece.

  • Hmmm, good point, I retract my earlier statement.

  • izengabe

    It would make the annual memberships more profitable for Citibike by encouraging less frequent users to buy annual memberships. With the commuter tax credits an NYC resident who might only occasionally use the Citibikes to commute would have a greater incentive to buy an annual pass.The close to 100,000 annual members bring Citibike nearly $10 million a year in annual revenue. If expanding the commuter tax credit to bike share brings in more users it could make Citibike more profitable.

  • The annual memberships are a loss leader for the operator. Adding more creates more losses as the operator has to spend real money maintaining and rebalancing the bikes that the annual members use.

    How about doubling the cost of annual membership, but having relatively frequent half-off sales? That’s how mattresses are sold. If you need a mattress today, you pay full price; if you can wait a couple weeks until the next sale, you pay much less.

  • BBnet3000

    They have tons of memberships but dont make much on them. The lack of day pass buying is the problem.

  • BBnet3000

    Quite a lot of them are near subway stations.

  • BBnet3000

    Heavily peaked ridership like that makes a transportation system very expensive to run.

  • BBnet3000

    Physical fitness doesnt improve well being?

    lolwut

  • nycbikecommuter

    Why? They drop the ferry frequency during off-rush hours.

  • BBnet3000

    Agree, though I think theyre just making the point that we heavily subsidize one but not the other.

    Given the ferries location on the edge, far away from most people, bikes and ferries can work together quite well (but of course, we’d need safe east-west bike routes in midtown for this to really work out).

  • BBnet3000

    Transit passes are 10x that. Theyre probably still 7-8x that in Miami as well.

  • BBnet3000

    Central Park seems like a no brainer. Its probably one of the only places in this city most tourists would actually feel safe riding.

  • BBnet3000

    Are the ferry drivers working part time, split shifts, or overtime to be able to work both rushes? Even if part time thats more employees to hire for both rushes, increasing overhead costs.

    The most cost effective transit service is always busy all day, as most subway lines are.

  • nycbikecommuter

    Sure, always-busy is the best but it is not possible, nothing is always busy, even subways are not as busy during off-hours, not to mention buses.

  • lop

    Yes but there are degrees of ‘peakiness’.

  • johnmassengale

    It was the Bloomberg administration that made Citi Bike happen, and it was characteristic of Mayor Bloomberg to think it would be best to do it with sponsorship and private money. Now that he’s no longer the mayor, perhaps the program could be taken over by the Bloomberg Foundation, which easily has the resources to pay for it. They could even be called Bloomberg Bikes, which would be appropriate.

  • Larry Littlefield

    How ironic that the shortage of daypass users is thought to be the problem when Citibike was accused of being just for tourists!

    It was never intended for tourists. That’s not how it was designed and sold. There have been implementation errors, and bad luck.

    Yes the winter has been rough. But the service has been used in the winter by its intended audience.

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