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.

  • Mark R. Brown

    What isn’t profitable isn’t necessarily a failure. It can be argued that bike share is as much a public good as water service or subways and deserves equitable access for all income groups.

  • Please, in today’s neo-liberal world, of course it’s a failure if it isn’t profitable.

    Except, of course, if you’re talking about charter schools….

  • The lack of citi bikes in some of the densest parts of the city, home to multiple huge tourist attractions like Central Park and at least a dozen world-class museums, is, frankly, a shame. Why on earth did some far-flung corners of Brooklyn get citi bikes before the UWS and UES? Why are areas dominated by low-rise single family homes with front yards getting citi bike before the neighborhoods dominated by 30+ story apartment buildings? Citi bike is great, but if the goal was to get a profitable system with maximum tourist ridership, they certainly dropped the ball when it came to station siting.

  • Jonathan

    How much should it cost to run a bike-share system, and how should that cost be distributed among long-term users, short-term users, sponsors, and the public at large? I have no illusions that the system should be a money-generating machine, but as I have mentioned before on Streetsblog, the most obvious way for the operator to make a profit would be to blanket the original coverage area even more densely and do more marketing to increase the number of users in that area. I don’t know if that strategy meets the public-service goals that some of us have for the program.

  • red_greenlight1

    Step one institute: One way trips on Citibikes costing between $2.50- $3.00. Step two: Let the money roll in.

  • Lower that to $2 and make it payable by metrocard, and I agree 100%. $10 is way too much for a 24-hour pass anyhow.

  • red_greenlight1

    “Far flung corners?” You mean places like Downtown Brooklyn, Fort Greene and BedStuy? Places where people live, work and commute to and from? “(A)reas dominated by low-rise single family homes with front yards?” Umm have you been to Brooklyn anytime in the like past century? There are very few single family homes in many of the areas in Brooklyn served by Citibike such as Dumbo and Downtown Brooklyn which have many many multi story buildings.

    Frankly your comment is extremely insulting and woefully misinformed. Citibike was never meant to be a tourist attraction or to move tourists about the city. It was designed to get New Yorkers around town. Not peddle tourists from attraction to attraction. Yes it needs to be expanded but first into or deeper into the cities most populated Boroughs which are Brooklyn and Queens.

  • Check out Monroe St b/w Bedford and Nostrand. There is a citi bike station on that block according to the official map. That block has a few low-rise apartment buildings but mostly single family row-houses with small front yards. I’m not saying it’s the suburbs, but it’s also certainly about 10 times less dense than the UWS or UES, and has much less than 10 times less appeal to tourists. Whether the goal is to make money from tourists, as the WSJ article claims, or to move NYers around, a station just north of 60th St in Manhattan is guaranteed to be more profitable than that station in Bed-Stuy.

    I’m all for the stations in DoBro or DUMBO, or even Brooklyn Heights or Williamsburg (though those neighborhoods are still less dense than UWS/UES). But Bed-Stuy and Clinton Hill getting stations ahead of UWS/UES makes ZERO sense no matter what your metric. Even from an equity standpoint, Bed-Stuy may be poorer, but with all the housing projects and rent control scattered throughout UWS/UES, I’d bet in terms of sheer numbers there are more low income people living in UWS/UES per square mile.

    As for “more people live in Brooklyn,” well, more people live in Texas than in NYC, maybe bike share should be expanded there, too? Obviously not, b/c density is the key figure, not population, and Manhattan’s density even as far out as Inwood still vastly outpaces Bed-Stuy. I don’t mean to start a borough war, but it is clear that politics played too large a role in citi bike’s station siting, and now we are seeing the consequences of that.

  • niccolomachiavelli

    I like Citibike, but I like even more solid argumentation. To state that Citibike is “just as much a public good as water service” is not by any standard a reasoned argument. Unfortunately it is the sort of hyperbole that one finds in many blog comments.

  • JamesR

    Thing is, this is a huge city. A city made up of cities, really. I visit Brooklyn and Queens a few times a year. I live in the Bronx, and those boroughs may as well be Philly to me. We want city bike up here, too. Brooklyn can go on the back burner for a bit while the system gets built out in other directions. Isn’t that only fair?

  • red_greenlight1

    Um in terms of population it’s not fair. Plus Brooklyn is always on the back burner.

  • JoshNY

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

    Because ferries are pork-barrel projects that motivate self-interested politicians.

  • red_greenlight1

    Sigh, lets look at population numbers here via wikipedia and city data

    Brooklyn 2,565,635
    Queens 2,272,771
    Upper West Side 149,783
    Upper East side 124,577
    Bedstuy 157,530

    As you can see despite the absence of highrise buildings, which seem to be your main criteria for evaluating worthiness for citibikes, we have larger percentage of the population then either UWS or UES. And more low income people?! Come on! Really?!

  • JK

    Can’t we subsidize Citibike without having to bailing out Alta? Alta appears to have done a very poor job vetting Bixie, their main sub-contractor, or moving effectively to solve a cascade of Bixie related problems. This led to expensive delays, software patches, power problems and much additional work by the city DOT to solve Alta’s problems for them. Before a dime of public money goes into Citibike, or the system is expanded, there needs to be a public assessment of Alta. Is Alta competent to continue running the existing system? Can we trust them to effectively operate an expanded system subsidized by our tax dollars? I wonder.

  • com63

    Raise the membership fee to $150 and I think most people will still renew. They should lower the NYCHA rate to $10-20 or something very nominal. I think the bigger problem there is how do you rent a bike worth $1000 to someone who may not have a credit card.

    The city should consider some sort of subsidized financing to help citibike with the capital costs of expansion. They should give loans at generous interest rates or with delayed repayment periods. They should allow city council members to use discretionary funds to buy citibike docks and bikes for their neighborhoods.

    It sounds like they also need to figure out how to make the system run more efficiently. Replacing 50 batteries every night sounds like a serious design flaw.

  • Reader

    Good points, and it’s certainly noble to want to provide access to bike share to less well-off neighborhoods, but I don’t see how the city can avoid the Upper East Side or Upper West Side if it wants to expand.

    Sure, you could have pocket or satellite systems that are self contained, but for the most part Citi Bike succeeds because of its proximity to transit, density, and jobs. It’s a networked system. That’s just the way bikeshare works.

    A handful of Citi Bike stations in Kingsbridge won’t do much good if they aren’t connected to a network of stations that stretch from the Bronx to the tip of Manhattan and down to the existing service area beginning at 59th Street.

    The city could probably carve out some extensions that would snake through less affluent neighborhoods — such as building out from Crown Heights to Bed-Stuy and East New York – but I don’t see any real way of getting around the fact that expansion will mostly start in wealthy neighborhoods first.

    There’s also the fact that NYCHA buildings in the existing service area have plenty of Citi Bike stations, yet low membership among NYCHA residents. I think more is at play than just access.

  • John Petro

    Which is why we should support Ydanis’ effort to “open up the books” of Alta.

  • Wow, you really aren’t reading what I’m writing. I said DENSITY, not population. Here’s a map for ya

    http://www.nyc.gov/html/dcp/pdf/census/census2010/m_pl_p2_nta.pdf

    It shows UWS/UES solidly in the 150+/acre and Bed-stuy as 50-74, so at least 3 times less dense. Even Inwood has twice the density of Bed-Stuy. The whole of Manhattan should have been covered by Citi bike before even touching Bed-Stuy.

    Even based on population, you’re still wrong. See this map
    https://data.cityofnewyork.us/City-Government/New-York-City-Population-By-Neighborhood-Tabulatio/swpk-hqdp
    It shows Clinton Hill, very well covered by cit bike, has only 35,000 population, whereas Lincoln Square, a geographically much smaller neighborhood with 0 citi bikes, has 61,000.

  • R

    What do you think would have happened when Citi Bike launched if it had only been in Manhattan and not in a few neighborhoods like Crown Heights?

    Citi Bike exists in a political space as well as a physical space.

  • JamesR

    LOL you’re telling someone who lives in the Bronx that Brooklyn is on the back burner when it comes to the provision of city amenities?

    Get real.

  • anon

    Or maybe back-up and do a franchise process that is vetted by Council like the law says?

  • I know. Sad, but true. I just wish the politicians would realize that the unprofitability of the system is of their own making and pony up the cash for expansion to very worthy neighborhoods.

  • SW

    – In “sheer numbers,” Bed Stuy has over 2-3 times more low-income residents than the UES or UWS (at a rate of 28% vs. 6-9%).

    – Transportation equity is not purely about income, it’s about mobility and increasing access to underserved people.
    – Consider checking your privilege at the door. I’m all for expanding Citibike to the UES, UWS and neighborhoods in every direction, but your tone is offputting.

  • red_greenlight1

    Your right I’m having trouble following your argument cause it keeps shifting. First its about tourists and attractions. Then high rises and now population density. Yet its completely obvious you know nothing about the neighborhoods in Brooklyn.

  • Joe R.

    I’m not sure density is the best metric to use here. I think lack of access to reasonable public transit could make bike share viable even in places with 1/10th the density of the UWS/UES. Remember Manhattan and downtown Brooklyn have loads of transportation options besides bike share. In most of the outer parts of Brooklyn or Queens, there’s not much other than automobile for local travel. Most public transit where I live is geared for getting to Manhattan, not getting around locally. Buses often require long waits and several transfers. Distances are often too far to walk. Bikes would be viable if not for the fact that secure bike parking largely doesn’t exist. Bike share solves that issue. I think bike share stations near major transportation hubs, shopping areas, and any reasonably dense residential area (i.e. 5 or 6 story apartments or higher) in the outer boroughs would work even if the density numbers indicate otherwise.

  • red_greenlight1

    Bronx never makes it on to the back burner. But the way you worded it gave no hint you’re from the Bronx.

  • Joe R.

    If you think Brooklyn is on the back burner, come out by me sometime. They don’t even keep most of the roads in any great shape, never mind actually getting things like bike share or subways out here. And it’s not because of lack of population density, either.

  • adw

    His comment said he lives in the Bronx. Is that not enough?

  • AnoNYC

    Brooklyn has been getting most of the attention (e.g. Citi Bike).

  • MiaBeach

    I live in Miami Beach, and the cheapest plan for “Decobikes” is $15 a month ($180 a year) which is almost double NYC. They can’t charge $10-$15 a month? How much are transit passes? I imagine more than double that!

  • MiaBeach

    It’s $24 for a one day pass in Miami Beach, and our rent and overall cost of living is a hell of a lot cheaper down here.

    $10 is way too low for a 24 hour pass – those are used by tourists. Gouge them. You know how much their hotel room cost?

  • Joe R.

    I can’t speak one way or the other about the battery because I don’t know the design but in my opinion the biggest design flaw was not going with airless tires. I’d love to see data on how much maintenance is spent either fixing flats or just topping off tires. I would imagine it’s a pretty penny.

  • inventropolis

    Subsidies may may sense, but Bixi is bankrupt and it is based on an old approach. Look at the new 800 Nextbike program planned for NJ. Nextbike is extremely credible with 60 programs in 16 countries on 4 continents (at its core Nextbike is a German software company).

    Step one is replace Bixi technology with Nextbike. Step two is keep the NYC Bike Share management and workers on (they did amazing work with little help).

    http://bit.ly/O7pHNn

  • AnoNYC
  • Kevin Love

    Another way is to build proper Dutch CROW standard cycle infra so the car drivers do not terrorize people away from cycling.

  • Bolwerk

    Isn’t the answer rather obvious? NYC subsidizes things that benefit unions and politically connected contractors. Bikeshare is a bit like automating transit: it benefits the general public only, and even saves public funds over subsidizing bus drivers and ferry operators.

  • gtf

    miami you can ride year round. nyc most riders give up for at least part of the winter. so $95 a year is more like $95 for 6-9 months for most users. not that different from miamis pricing then. also a lot of citibike users have transit passes too.

  • Wi Cho

    What they need is to get rid of the current system now since its BEYOND repairable and hire a successful bike share company either in USA or other country.

  • Canonchet

    Ferries vs. bikes? Please don’t make this an either-or proposition – a good example of a ‘false choice.’ Both are needed and deserve support. Direct and indirect subsidies to private car commuters exceed all public transit subsidies (including the tiny East River Ferry sliver) by several orders of magnitude.

  • Twofooted

    I don’t think he’s making it a false choice. He didn’t say either/or. He’s saying that if we have the money and incentive to subsidize something that’s lightly used in comparison to Citi Bike, there seems to be diminishing reasons to not subsidize bike share.

  • AnoNYC

    I agree. If anything, let’s encourage congestion pricing for all public transit (and provide Citi Bike public funding).

  • AnoNYC

    A lot of people will see it as an either or with no alternative (e.g. congestion pricing for both).

  • AnoNYC

    What prevents the bikes from bunch up at certain locations?

  • inventropolis

    usage patterns are the same.

    one advantage with Nextbike is that if a Citibiker arrives at a [bunched up location] or station, that Citibiker can park it nearby dumb rack, sign, or any other place without getting penalized.

    a second advantage is Nextbike’s back-end software’s ability to more accurately predict imbalances [bunched up locations] and proactively address potential oversupplies before they become and issue.

    a third advantage is that (in contrast to Bixi software which is limited and buggy), Nextbike software is slick and enables “super users” who can receive points toward an affinity award by riding a bike to another station. For instance, if the “super user” moves 5 Citibikes from an over supplied station to an under supplied one, that “super user” could get $10 off next purchase at Models, or some restaurant or some other affinity opportunity.

    Usage patterns are likely the same; Nextbike software shoots down problems like being [bunched up] before they happen.

    A lot of it just comes down to really good software that enables more efficient operational models.

  • jooltman

    Best way to get around town for 40k people a day, hands down. Any politicians who don’t realize this, should speak to their constituents about the need for affordable, reliable transit, and support this program post haste.

  • izengabe

    One simple thing the Federal Government could do to help the bike share
    program is expand the Federal Commuter Tax Credit to include bike share
    programs. Currently bike share programs are not included in the commuter
    tax credit. Which means commuters who use subways, trains, buses, vans
    and parking to get to work can deduct the cost from their federal taxes,
    while the people who commute via bike share program cannot. This is an
    unfair disadvantage that hurts bike share programs as a means of
    commuting. Expanding the tax credit to include bike shares is not only
    the right thing to do it can also help privately funded systems like
    Citibike and reduce overcrowding on government funded subways and buses.

  • iSkyscraper

    Absolutely correct. I’ve been watching bikeshare ever since Bixi came out in Montreal, and I rolled my eyes every time a new city would claim the service would be profitable. Just come out and say it is a form of public transit and deserving of subsidy already. If you privatized some subway lines it would be the same thing — private vehicles, private operator, public ridership, public subsidy. It proves a public good that is worth collectively paying for.

    This path is now being forced by Bixi’s troubles — Toronto just had their parking authority take over their Bixi system, and others will likely follow. Just subsidize the thing and start expanding. It’s a (public) good thing.

  • Larry Littlefield

    I think this article makes an important point. Citibike is a huge success. Alta is in trouble due to a combination of business mistakes (the software, putting all the bikes in a flood location) and bad luck (the winter).

    The worst case solution is the same as for the Yankee Stadium parking garage: Chapter 11, reorganization as an ongoing concern. With far better prospects for the concern to be ongoing. To understand what that might mean, look to the airlines.

    1) Customers will be protected. Yes, the reorganization plan could force those who have already paid for a year of Citibike to pay again, but that might mean customers would be lost, and the value to creditors would fall. If Citibike is to be successful, existing purchased transportation would be honored by the restarted service, just like existing tickets and frequent flier miles are in airline bankruptcy.

    2) Workers have nothing to lose. In the airline bankruptcy, the employees often had lots of deferred compensation and above market wages. That was often lost in bankruptcy. That is not true for Citibike workers. The company may in fact be squeezing them to stay alive as it is, and they may be better off after reorganization.

    3) Management may or may not be replaced. Since the City of New York is in effect an unsecured creditor (it gave up street space in exchange for the provision of a certain service level which has not been achieved), it may have a say on that.

    4) Citi and Mastercard might be wiped out. They paid for several years of sponsorship, but after Chapter 11 this could be bidded out again as part of a cash infusion. Given that, Citi and Mastercard may be willing to work out some sort of deal outside Chapter 11 is bankruptcy is threatened.

  • Fernando Sampieri Ferretti

    It’s stupid to think that one can improve his/her well being by riding
    bicycles than driving cars.

    The problem is how to find alternative clean energy and improve efficiency, NOT
    how to go back to stone age!

  • Peter

    While this would be fair, I question how much it would help. I suspect that, among lower-income people for whom an $8/month annual pass is out-of-reach, a tax credit makes little difference. They may be unemployed, working off-the-books, or making so little as to pay no income tax anyway. The tax credit, I suspect, primarily benefits middle class commuters.

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