To Reach 10,000 Bikes, DOT Looks to Sponsorships, Sandy Recovery Loan

With 6,000 bicycles, New York’s bike-share program is already the largest in the country. In fact, immediately after launching, Citi Bike proceeded to eclipse the national daily ridership record (previously held by Capital Bikeshare), with 12,000 trips in 24 hours. Ridership should grow steadily as more people start using the bikes and the network expands, but how quickly will Citi Bike grow beyond the initial service area? Appearing on the Brian Lehrer Show this morning, Transportation Commissioner Janette Sadik-Khan discussed how the city intends to land the funds to implement the original plan for a 10,000-bike system.

Photo: ##http://www.flickr.com/photos/shinyasuzuki/8858803447/##Shinya Suzuki/Flickr##

The winning bid from system operator Alta Bicycle Share in 2011 envisioned a 10,000-bike/600-station system, but after Hurricane Sandy flooded a bike-share warehouse in the Brooklyn Navy Yard, the damage limited what could be built with available funds to 7,000 bikes at 420 stations. About 100 of those stations have yet to come online; the city plans to add them before the end of the year.

The city also still intends to ramp up to a 10,000-bike system. Making up for the damage from Sandy is no small challenge, however, especially since the city has emphasized that Citi Bike, unlike most other bike-share programs, will not receive any taxpayer money.

At the end of the interview with Lehrer, Sadik-Khan said that DOT would be looking at Sandy recovery loans and additional sponsorships to expand the system to more neighborhoods. “We’re continuing to work with sponsors on that, and we’re continuing to work with the Small Business Administration on a loan to make up for the bikes that were lost during Sandy,” she said.

New York would not be the first city to receive an SBA loan for bike-share, though it would probably be the first to apply disaster recovery funds. In Chicago, SBA provided a $350,000 loan to a 100-bike program operated by B-cycle, which is now closed and being replaced by the larger, Alta-operated Divvy bike-share program this summer.

  • Anonymous

    Insurance? Indemnity. Do these people do contracts? There’s no reason that corporate sponsors/taxpayers should fill the gap for what they contractually promised.

    If they’re unable to perform the contract, then why aren’t they in default? And if they’re in default, why aren’t they curing such default by raising equity?

    In other words, their investors should pony up the funds for 10,000 bikes and 600 stations. Not Google, Apple or the Taxpayers.

  • guest

    I think it’s disingenuous to say “no taxpayer money” then take Sandy loans – just because it’s Taxpayers from another state doesn’t make it any different [ethically].

    Then again, no one’s ethical.

  • Anonymous

    There is a broader question of what penalties if any, Alta has had to pay. The system is a year late in addition to being 40% missing. Have the taxpayers been compensated for choosing Alta in part on the grounds that it was more experienced and better able to provide the service it promised?

  • Anonymous

    I think it is fair to say it launched fully funded privately (not including all the labor the DoT has put in).

    That being said, we should not expect it to remain privately funded. It is important that CitiBike expands to at least 4, if not all 5 boroughs (Staten Island might be harder). Queens, the Bronx, and upper Manhattan desperately need to be included.

    CitiBike can be a huge boon for lower income groups with an annual cost < than a monthly metrocard. Additionally, people in lower income housing have less time for exercise, and consequently, worse health. These are all issues CitiBike can help with.

  • Eddie

    “No taxpayer money” shouldn’t be taken too literally. After all, our taxes are paying the salaries of the DOT employees who are assigned to the Citi Bike project.

  • SGreenberg

    This should be publicly funded. In the meantime… Kickstarter?

  • Anonymous

    But that’s their job. They’re not being paid extra. They’re doing the same “type” of shit they’d always be doing.

    That’s the same argument I make when people complain about the NIMBY lawsuits and the costs to the city’s attorneys. They already address hundreds of NIMBY lawsuits and BS. It’s not like they hired extra attorney’s to defend PPW.

  • It looks to me like the city didn’t have too many options with the contract. If they had cancelled it after the hurricane damage was revealed, then we would be waiting until 2015 for new bidders to prepare bids, be chosen, then build out a new system. Ben Fried’s December 2012 article mentions insurance, and also that the damage wasn’t to bikes, but to other parts of the system.

  • Anonymous

    Jarek,
    Nice question, but when FEMA and other state of emergency
    funds are used for replacing so much strange private property and
    private enterprises, it’s hard to see where replacing public transportation bike share equipment
    lost to Sandy is out of line at all.

    Taking another tack, look at
    all the federal and state money wasted on new and expanded highway
    projects, particularly when they won’t even spend for maintaining the
    worn out roads they got; much less fund transit, walking, biking or bike share.

    The marginal cost of moving the next person around
    NYC by installing bike share, especially as it is coordinated with rail transit for long
    haul trips, is far lower than the cost of expanding the bus, the subway and
    particularly the roadway and car parking system. A dollar to bike share is worth more right now than a dollar for roads, car parking, buses and subways. And it won’t take very many dollars in total to build a citywide bike share system, compared to cars, buses and rail.

    However it’s
    funded, bike share is saving us money compared to paying for the
    expansion of every other mode, and will keep on saving until the whole
    city is covered with a net of Bike Share Stations.

  • Anonymous

    Yah, that makes sense. There’s usually an out to contracts for “Material Adverse Events,” which act as a “freebie” for mess-ups. I think Hurricane Sandy would qualify.

    And it’s not like there are other entities qualified to step in. Nevertheless, there are supposed to be penalties for situations like this and I would rather we go to the equity holders instead of the tax payers hat in hand. We ain’t the Yankees who have the political clout to get the taxpayers on the hook for about $150M for an empty ass parking garage.

    Has anyone seen the contract? Is it public? Sounds ripe for a FOIA.

  • Anonymous

    I think you’re speaking to the principal reasons as to why we should consider it a public service and why we shouldn’t have issues with it being publicly supported, to which I agree.

    My point speaks to the contract and what Alta promised. If they promised X, they should deliver X and if they’re unable to do so for financial reasons, then their equity owners should step up to fill that financing gap.

  • Mark Walker

    I’m bummed about the phase-one setbacks because the program won’t reach my neighborhood (the West Nineties) till phase two with no sponsorship or realistic timeline in sight. So bike share isn’t an option for me unless I want to travel to/from my start/end points by subway. Queens and the Bronx are in the same position, and the northern reaches of those boroughs don’t get covered till phase three. A lot depends on the next mayor. Maybe this would be a good time to make a campaign issue out of the next phases.

  • ohnonononono

    Hm, I hope Upper Manhattan gets bikes soon!

  • Of course there are other entities ready to step in. Ever heard of B-cycle? Unlike Bixi/Alta, they actually deliver what they promise.

  • Sundae
  • Anonymous

    I’m making a case for quietly taking federal disaster relief funds just like ever other public and private victim in this country does. Alta has not been perfect. Far from it, they really screwed up the software issue. But the Hurricane Sandy damage was in the Katrina and tornado class of disaster. We, the users sufferer if we are too proud to try for disaster funding to make that loss whole and complete phase one quickly. There are other things and other times to push Alta about.

  • Anonymous

    I agree. I fear that any instance in which Bikeshare gets any government money (even in cases where it should be justified, such as this) will be pure catnip for NYPost and DN.

    Further, they’d then put this into the rubric of “bail-outs” and run with it and the less tabloid media would report “the controversy.”

    But I think you make very good points as this was clearly Sandy damages and this is a public purpose. Though I can picture it. Some poor SI resident, with their home destroyed, standing next to their ruins, holding a photo of their old house (for which they should’ve gotten flood insurance) with any of the following ready made headlines:

    (a) Bloomberg to residents made homeless by Sandy: Get a bike!

    (b) Why does the Mayor prioritize bikes over homes? or
    (c) Sandy victims, victimized again. Bikes to blame?

  • Anonymous

    It’s hard to see how it would be difficult to make the case for additional private investment, from Citi or otherwise. A majority of the most populous residential neighborhoods of NYC are still not included in the program – there’s got to be massive pent-up demand for subscriptions. So the notion of needing a public loan seems a little ridiculous, at least in order to bring bikeshare to neighborhoods that are overflowing with people eager to use it and pay for it (like mine).

    Perhaps sponsors are waiting to see what the public response is – hopefully it won’t take long before that’s clear.

  • It delights me to no end how fear or just aversion of the NY Post leads people to belief that corporate funding is most suited for subsidizing this system.

  • Daphna

    The numbers are terrific! 12,000 trips in the first 24 hours during a preview period when only the first 13,000 members could use it, when software glitches were occurring, and when many stations were out of order. About 18,000 people joined before the system was even running, and by the end of the first day there were over 20,000 annual members. Even today in the rain people were using it. This is going to surpass all predictions. The predictions predict about a 10 to 1 ratio of people joining per bike. This would mean 60,000 members. I think NYC Bikeshare will reach that figure in the first month alone and will grow lots more each subsequent month. I think NYC Bikeshare could reach 50,000 rides per day! Maybe with these high numbers, showing such positive public reception and so much public demand, more sponsors will want to join.

    It does not take much money to make this work compared to any other transportation infrastructure. Roads, bridges, parking garages, subways, buses, access-a-ride, railroads – bikeshare is a tiny fraction by comparison. I hope the money comes from somewhere. It would be a shame to have it held up by lack of money when in the scheme of things, it is not a lot of money. (This reminds me of the East River greenway not being completed over an amount of money that is nothing when compared to infrastructure spending for cars.)

  • Bronxite

    Once this program expands, we will see even more dramatic increases in annual memberships. It makes sense and New Yorkers realize this.

  • Bronxite

    +Bronx. Uptown needs this.

  • Anonymous

    These are two different things:

    1) Whether corporate sponsorship is, in the abstract, the best way of financing a transportation system, especially one with the relatively trivial costs of bike share. I suspect that most people on here would say it’s not. I certainly would–and have said so as noisily as I can since the whole business was first floated.

    2) Whether corporate sponsorship is, in political terms, the best way of financing a bike share system in New York City at a point in history where providing a single dollar of federal emergency aid to devastated areas is a political controversy. My sense is this is what most people on here are commenting on: the realpolitik of bike share.

    Hardly seems like a coincidence that the occasional Ad Busters-style pretending-to-be-leftier-than-thou-while-only-revealing-the-narrowness-of-one’s-experience finger wagging comes from people who don’t need the system the way others do.

  • Guest

    Can we really trust the usage numbers put out by CitiBikes and DOT’? Not for one minute!

  • Daniel Winks

    Poor health in lower income segments is primarily due to poor diet, not lack of exercise. Higher income groups have better health, even if they’re driving instead of walking/taking the subway and consequently getting less exercise than poorer groups. Diet is extremely important to health, and lower income groups tend to eat a LOT of nasty crap filled with High Fructose Corn Syrup, which metabolically is a POISON and should NEVER been eaten by anyone.

  • carma

    to be honest. i could care less what advertising plasters all over my rental bike. if it pays for the expansion of the next phases im all game. having my first 2 days experiencing this (although the bikes are as heavy as trucks), i cant wait for the next phases.

    i would be willing to pony up more for the annual membership if it means more service areas.

  • Anonymous

    Me too, they could say “Palin for president” for all I care. I might draw the line at Nazi insignia, though.

  • carma

    i think ill draw the line with palin for president.

  • If it cost too much it won’t be popular enough.

  • Do you think they’ll will listen if enough people are mad about it not going far enough?

    People get angry about un equal park and playground investment– why not this too.

    It’s an amenity and its no fun being left out.

  • I think they are both issues.

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