Hard Times for NYC’s Bike-Share Program

by Jillian Kay Melchior

Despite its popularity with city dwellers, New York City’s bike-share program is losing money, the Wall Street Journal reports today:

Leaders of Citi Bike are moving quickly to raise tens of millions of dollars to rescue the popular bike-share program as it loses money, according to people familiar with the matter. . . .

Earlier this month, Polly Trottenberg, the city’s new transportation commissioner, said the bike-share program faced “a number of financial and operational challenges,” though she didn’t detail them.

Citi Bike has been forced to contend with a number of costly issues, including damage to equipment during superstorm Sandy, software glitches and a difficult 2013-14 winter that discouraged ridership. . . .

One issue is that Citi Bike has proved more popular than expected with annual users who generate comparatively little revenue. Some 99,000 people pay $95 a year plus tax to be able to use the bikes for 45 minutes at a time.

The potential for far greater revenue, however, is with short-term users. Many of those were expected to be tourists, and they haven’t used the bikes nearly as much as officials had anticipated, people familiar with the matter said. . . .

Operational difficulties have also troubled Citi Bike. The task of moving bikes to respond to the patterns of commuters—those who grab a bike in the West Village to Midtown in the morning but may not ride it home at night—has been more cumbersome than expected in New York City traffic. That has raised costs.

Also, some 50 batteries have to be changed manually at the system’s 330 docking stations every night, requiring Citi Bike to hire a subcontractor just to do the job, according to people familiar with the matter.

Citi Bike has been forced to lay off some workers because of the financial strain, which has made it more difficult to operate the sprawling network and respond to customers, the people familiar with the matter said.

The upside is that New York City’s bike share—unlike those in many other big cities—doesn’t receive tax dollars, and is instead getting its funding from sponsorships, ads, and consumers who use the bikes. The Wall Street Journal reports that despite struggling financially, the bike-share program won’t seek public funding.