Should Alta Be Running NYC Bike-Share?

With today’s report in the Daily News that Citi Bike operator Alta Bicycle Share is failing to meet several key performance targets, a short run-down of the current state of bike-share operations in New York City is in order.

What we’ve learned since Citi Bike launched last May is that bike-share works in NYC. It fulfills transportation needs, demand is huge, and people can use it safely in large numbers. Bike-share has tremendous value and could potentially bring a new low-cost, short-distance travel option to many more New Yorkers if it expands beyond the current service area.

The unsettled question is whether the contractors responsible for Citi Bike are cut out to run it in the long term.

One half of this question has already been answered. Bixi, the supplier of the system, had a great bike-share bicycle but messed up royally by ditching their software provider, 8D Technologies. Bixi’s attempts to replace 8D’s platform failed, and Citi Bike performance suffered as a result. When the company filed for bankruptcy earlier this year, it created an opening that other suppliers (including 8D) can fill. It’s unclear who will furnish NYC bike-share with equipment and technology in the long run, but it won’t be Bixi.

The other half of the question is whether Alta is the right company to run Citi Bike. The city is understandably displeased with Alta’s performance, with DOT Commissioner Polly Trottenberg telling the Daily News she wants to see concrete customer service improvements.

Alta was clearly hobbled to some extent by Bixi’s technology failures, but today’s news that the company’s performance on basic maintenance and operations tasks has actually gotten worse over time doesn’t inspire confidence. Alta, for its part, says it is seeking investors to help it through its current difficulties.

Bike-share in New York has exceeded all projections in terms of membership and usage. If Alta can’t capitalize on that momentum, right the ship, and attract investment, maybe someone else can.

  • Bike Sharer

    Answer: No.

    Alta is in way over its head. It needs to sell the company to a company or group that can really operate this system at the scale required.

  • Anxiously Awaiting Bikeshare

    Or sell to the MTA or some other government entity. I still don’t understand why it needs to be a public-private partnership.

  • JK

    Hard to see how Alta can be part of any expansion of Citi Bike, especially using public funds. You don’t have to be a genius to figure out that DOT and City Hall have totally lost confidence in them — where did the Daily News get all those terrible performance stats?All and all, the impression is of a vendor who is treading water and lurching from one crisis to another. Where do you start? We aren’t hearing anything about crucial system improvements, one not often mentioned is mobile or online payment for weekly, daily or hourly rentals. Maybe a big reason one-day pass revenue is so low is because the payment kiosks have a terrible User Interface. On three different weekends last Fall I saw big lines of tourists lined up outside the kiosks on Broadway from 58th St down to the Forties. It took a ridiculous amount of time for each person to process their transaction, and many people tired of waiting and walked away. Bikeshare is a genius idea, but NYC needs to seriously rethink how it should work, and who should be operating it.

  • GJ

    This spate of negative PR seems like a leadup to Alta declaring bankruptcy and the city voiding the contract. Are there other vendors capable of stepping up and doing the job right?

  • Our bus and subway system would truly be the envy of the world if the same sort of hard-nosed evaluations went into whether the MTA should continue to operate our transit.

  • Jury still out

    It hasn’t even been a year yet…. Sure there have been problems, but it has been an enormous rollout with some serious unforseen problems (Sandy, Bixi’s software, 99,000 annual members in under a year, no public funding, Polar Vortex). Has any other Bike Share company (B-Cycle, Deco Bike, etc). had to grapple with the same number and size of these hits while under sustained attack by anti-bike foes with powerful allies?

    Alta’s bikeshare systems in DC and Boston are running really well. Let’s give them a chance to make it better. And who knows? Maybe Bloomberg Philanthropies can spare some pocket change to be the “new investor” in Alta.

  • Anxiously Awaiting Bikeshare

    Yes, but not having flood insurance was a pretty bad business decision and it being cold shouldn’t sink your company, even that can risk-managed away:

    http://en.wikipedia.org/wiki/Weather_derivative

  • Joe

    I think whoever runs Citibike, whether it’s Alta or some other company, should be required to do so in a manner TRANSPARENT to the public. Without transparency, we have no way to judge how good a job they’re doing, what the problems are and how to solve them.

    Here are a few questions I’d like to know the answers to:

    – How much is Alta spending on fixing faulty docks? What are the problems the docks have that need fixing, and how much is each problem costing?

    – How much rebalancing is being done? From where to where, and when? How much does this cost to do?

    – What else is Alta spending money on and how much?

    – We all know how problematic the new software has been. Why not open source it? I’m sure there are hundreds of skilled programmers who’d be interested in improving it for free.

    …and many more. Anyone who’s been following the program knows we get no real information, just leaks and rumors.

    I have no problem with Alta making a profit (I wish they were, in fact). But is there any reason for them, and the DOT, to run this enterprise so secretively?

    (By “reason” I mean “reason in the public interest”, not “corporate and bureaucratic imperative.”)

    Keeping things hidden away just allows problems to fester and grow in the dark. Bikeshare in NYC is too important to let that happen here!

  • JoshNY

    I wonder the same thing. Since the conclusion certainly seems to be that Alta shouldn’t be running the bike share program, absent some significant improvement in performance, who are the other vendors that might replace them?

  • Sfgeoninja

    Wrong. Our transit system would be the envy of the world the moment the federal government decided it believed in transit again. MTA is doing its best after being dealt a terrible hand. With the % of federal subsidy declining each year, it’s a miracle we get to preserve existing service, let alone capital projects.

  • inventropolis

    B-cycle, Nextbike are the two obvious ones. Both are very well run, experienced, with quality product.

  • inventropolis

    As noted in piece, Bixi needs to be replaced. Do that before any more money is spent. Logical one is German Nextbike, recently selected for NJ’s 800 bike program. Nextbike has more bikes in operation across globe than B-cycle, Deco, Bike Nation, Cyclehop, and Sobi combined. At its core, Nextbike is a software company. http://bit.ly/O7pHNn

  • Nicole Gelinas

    Yes.

  • guest

    Is transparency really the problem? The issue with Alta is that they’re bike share cum transit idealogues; not experienced operations managers.

  • Larry Littlefield

    Chapter 11 was intended to allow viable concerns sunk by a few bad decisions and bad luck to re-boot. Sometimes management is replaced, and sometimes it isn’t. Service is maintained. Customers are protected.

    A process already exists to deal with this.

    Just as long as GM doesn’t take over and change the Citibike stations back to auto parking.

  • Eddie
  • Daniel

    I checked out their website after reading this and there is a link to the reports with their revenue numbers and performance data:
    https://citibikenyc.com/system-data
    The one thing it is missing is what their expenses look like. I don’t know when this showed up but the reports go back to July.

  • Eric McClure

    Larry, I actually think it makes a ton of sense for a major auto manufacturer to purchase Bixi/Alta. They know that young city dwellers are increasingly less interested in driving, and I know from people in the car industry that they’re quite concerned about this, and are taking a serious look at the growing interest in biking. Obviously they can’t repeat what happened with the trolleys, because someone else would come along and fill the void. But a smart auto company will understand that urban cycling is the future and that bike share could complement its existing product offerings. These are big companies with lots of manufacturing and logistics expertise, and lots of R&D capability.

    I, for one, would not at all be surprised to see Toyota or Nissan or Volkswagen or Ford making a push into bike share.

  • wt

    And then once they have their foot in the door they push for their version of zipcar rentals with new green electric microcars instead of more street space for bikes.

  • Eric McClure

    The city controls the franchise, so that can be prevented. And a green electric microcar is still a car; young urbanites could drive Priuses or Leafs if they wanted to drive cars, but they want to ride bikes. You can argue that the big auto companies are evil, but not that they’re stupid.

  • Bcycle IS deco .

  • Harald

    But none of them run any system as large as the NYC one.

  • M

    I would think the main reason daily passes aren’t more popular is because of their price – $10.83 for a single day

  • Matt

    Alta’s bikeshare system in DC (Capital Bikeshare) and Boston (Hubway) were created with 8D software- prior to the split between Bixi and 8D. Bixi made the bikes. 8D created the software to run the system, and they worked really well together. That played a major part in the systems in DC and Boston taking off in the manner they have. Essentially Bixi tried to cut 8D out of the loop and steal their software/technology, resulting in 8D suing Bixi, and subsequently, Bixi counter-suing 8D. The entire thing has been a mess.

    Bixi’s demise was no surprise to anyone who happens to work in the bikesharing industry and is privy to fairly hard to find information. A year before they filed for bankruptcy, people were already waiting to hear that the company had imploded. Alta of course knew all of this information and was caught in the middle. While it certainly wasn’t their fault, the lack of transparency prior to Bixi filing bankruptcy has now caused minor to major issues for bikesharing across the country. Cities with plans to implement bikeshare programs have essentially put everything on an indefinite hold until Alta can find a way to remedy this mess; and cities like New York are now caught in an unnecessary situation.

    Transparency is absolutely key to a successful bikesharing program. If you look at Capital Bikeshare in DC, you’ll see an unprecedented amount of information being shared. That transparency has allowed for a lot of great advancements and ideas from people not associated with the program at all.

  • Jury still out

    NJ Transit, MTA, Con Ed, and thousands of homeowners and business owners in in Manhattan, Brooklyn, Queens, and Nassau, not to mention New Jersey, made the same business decision on Sandy, and also lost bigtime.

  • stairbob

    It always cracks me up when people volunteer Bloomberg’s personal fortune to solve every and any problem. Why don’t you make a billion dollars and donate it to bike share?

  • Joe R.

    I would love to see someone go big mass producing velomobiles. At present velomobiles are produced in relatively small numbers. As a result, they’re hideously expensive ( i.e. $10K and up). Automakers already have the tooling plus much of the expertise for this. In fact, if they throw some millions at wind tunnel testing they may come up with novel shapes which reduce drag even more than the existing products. Come up with a velomobile which sells for under $3K, is streamlined enough to let an average user cruise at highway speed, and you’ll have a HUGE market. Young people may not want cars, but they’ll jump all over something human-powered which is 4 to 6 times faster than a regular bike. I know I would.

  • inventropolis

    From a software perspective, much of Nextbike’s 17,000 global portfolio runs on a single software program in cloud.

  • JK

    Daily pass is much cheaper than bike rental from a shop. (Much to the annoyance of shop owners.)

  • Eric McClure

    Joe, based on what you’ve posted on Streetsblog in the past, 4 to 6 times faster than a regular bike would have you riding around at 100 to 150 miles per hour.

    😉

  • Wilfried84

    I believe B-Cycle only sells hardware, they don’t run their systems, which is handled by local organizations. Please correct me if I’m wrong.

  • Wilfried84

    While I’m not arguing against ditching Alta, it strikes me that switching vendors will be very costly. At best, the transition will cause confusion and uncertainly. Would there be an interruption of service? Would the transition be smooth for the end user? Other vendors come with their own hardware. Will the hardware have to be replaced? If so, how long will that take, how much will it cost, and is there any certainty once City Bike is gone that something else will actually come in its place? Which is more likely to ensure the continuation of the system, trying to fix Alta somehow, or ditching them for someone else?

    As an aside, Alison Cohen, then president of Alta and it’s public face, left the company last April, just weeks before the New York launch, Alta’s biggest project to date. There was no reason given, except the generic “to pursue other opportunities.” What was going on there?

    BTW, what’s going on in Chicago, another Alta system launched after New York?

  • NYer

    Janette Sadik-Khan deserves a fair share of the blame for this mess.

  • Bolwerk

    Care to explain that, or was it only intended to be left there like a turd on the floor?

  • inventropolis

    sorry, grey area. IMHO, all scenarios should include keeping NYC Bike Share (the local Alta subsidiary). They have done an outstanding job given the silliness elsewhere. IMHO NYC Bike Share should be partnered with B-cycle or Nextbike.

  • izengabe

    Citibike is less than a year old and is in a sense still in its beta testing phase. Are there problems? Sure. But most of the problems can be solved with time and expansion of the program. More bikes and bike docks in heavily used areas could solve some dock block problems that requires expensive constant rebalancing. The 1st 9 months of Citibike has proven the program to be extremely popular with New Yorkers. The 100,000 annual members prove there is a real need for it. With time and experience the minor problems within the program will work itself out. Lets remember Alta is a private company running a mass transit program that doesnt receive even a penny of taxpayer money. In fact because of the sales tax on Citibike purchases the City actually makes money off of Citibike. To me the complains are a form of looking a gift horse in the mouth about a mass transit program that doesnt cost the taxpayers, makes travelling around the City easier and relieves congestion off of buses and subway. I think most of the griping about Alta is really sour grapes from people who really opposed the bike share program from the start.

  • JK

    You’re mistaken. The toughest critics here avidly support bike share and want to see it succeed. Unfortunately, Citibike/Alta has neither the time to improve, nor the ability to expand without a huge infusion of private financing or some form of public subsidy, and neither is forthcoming given City Hall / DOT’s clear lack of confidence in the vendor.

  • Larry Littlefield

    If they were that forward looking they’d be pushing dynamic carpooling.

    It’s one way poorer younger generations of Americans — and people in developing countries — would be able to afford to buy and fuel new cars. Buy full sized sedans, and fill the seats with people sharing the cost while using their electronic devices.

  • Chappie

    Bloomberg has $33 billion and counting. Sure, he’s no longer the mayor, but he fought for the program. As a philanthropist, he should use his staggering wealth to fix this program instead of going after the 2nd Amendment.

  • Cohen left to handle bike share at another consultancy, and I doubt they would have hired her if she was doing something bad or wrong at Alta. And did she leave after the planned launch date which was postponed for so long?

    My suspicion is that her departure had something to do with Alta’s alleged labor-exploitation problems at Capital Bikeshare, though I am not sure what happened with that. The aggrieved employees targeted Mia Birk — I think Capital 2.0 (with Alta) got going before Cohen joined Alta.

  • MelC OG

    This is definitely an issue of the bike share being poorly run by Mia Birk at Alta Bike Share. In order to succeed, NYC Bike Share will need to find another group to manage the program, or Mia Birk will have to resign.

    There’s definitely something fishy going on. Let’s look at the recent timeline:

    2012, Alta pays Gabe Klein in Chicago $10,000 in favor of awarding them a contract.

    June 2013, Feds investigate Alta over pay dispute & poor working
    conditions.

    January 2014, Alta Management team quitting to form NEW bike
    consultancy group:

    January 2014, PBSC goes bankrupt

    March 2014, GM of bike share steps down, among rumors of NYC bike share
    shutting down

    Portland bike share delayed (although, this is normal for ALTA as almost all their projects have been delayed). With a timeline where you’re always delayed – how is that sustainable for business. Alta’s taking on too much – a planning company & a full-service bike company? They can’t do it, and they obviously can’t do it with Mia Birk’s failed leadership.

    Sources.

    http://www.suntimes.com/11341996-417/rival-citys-bike-sharing-program-tainted.html

    http://www.wnyc.org/story/299973-department-labor-investigates-alta-bikeshare-over-dc-pay-dispute/

    http://www.theglobeandmail.com/news/british-columbia/setbacks-plague-bixi-bike-share-program/article16624180/

    http://online.wsj.com/news/articles/SB10001424052702304418404579463740691474688

  • RunningWriting

    PBSC is not the same company as Alta. Alta obtained bikes and stations from Bixi, until Bixi filed for bankruptcy. Earlier this year, Alta and 8D announced a new partnership, which seems to be designed to cut Bixi out of the loop. Bixi did not produce the software or the bikes for existing bikeshare systems. Alta and 8D can handle the software and the stations. They can contract with the Bixi partner to obtain bikes or set up a deal with a different bike manufacturer.

    Bixi’s bankruptcy does present some challenges, but Alta and 8D can move on from Bixi.

  • qrt145

    “set up a deal with a different bike manufacturer”

    Aren’t the bikes and docks patented by Bixi? I thought I read that somewhere, probably in the NYT. If that’s true, I don’t think they can cut Bixi out of the loop entirely (at least they’d have to pay Bixi for licensing), unless they replace both the bikes and the docks.

  • erk magosh

    I beleive Deco uses Sandvault kiosks and generic bikes from China (as apposed to the Trek bikes made by Giant in China of B-cycle)

    Here is an article about the two Miami area bikeshares:
    http://wlrn.org/post/tale-two-bike-shares-miami-beach-broward

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