Streams

Citi Bike Bailout Not Till End of Summer

Thursday, July 03, 2014 - 01:33 PM

Citibikes parked in front of The Apple Store in midtown Manhattan. (Natalie Fertig/WNYC)

New York's financially beleaguered bikeshare system may have a white knight, but any deal to save the program could be weeks or months away.  Which means riders will have to struggle with empty (or full) docks, buggy software and a limited coverage area at least until the fall, sources familiar with the talks to save the popular yet frustrating program tell WNYC.

Citi Bike is just months away from running out of money, even though it has over 100,000 annual members. Now, rescue may be coming in the form of REQX Ventures, an investment company formed earlier this year by principals at Equinox Fitness, a chain of fitness centers, and its real estate parent company, Related.

Sources close to the negotiations say REQX is in talks with the city to purchase a majority stake in Alta, the Portland-based company that currently operates New York's bike share system. 

The cash infusion is intended to expand Citi Bike, improve its management and fix software that has infuriated users. While details of the contract are still being worked out, the cost of an annual membership could go up – but the city will likely cap just how high they can go.  

Both the mayor's office and a spokesperson for the Related Companies declined to comment.

 

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Comments [11]

Tal Barzilai from Pleasantville, NY

How about Bloomberg himself provides the money for this since it was his idea to begin with so that way no taxpayer dollars will be needed at all?

Jul. 08 2014 10:39 PM
Mary U from TN

Gee, if only there were a high profile NY multi-billionaire somewhere who pushed for this program and would be willing to put some of his own money into this. Who might such a person be?

Jul. 08 2014 10:18 AM
TOM, the Economic NYC Manm from Brooklyn

Two pieces of information necessary to consideration of this deal. Any party wanting to invest private or public money needs to know these numbers. These facts are known but not made public. First, of the current 100k annual members what is their participation rate. Are they frequent users or are they casual? How many never use it enough to consider renewing their membership? It's a lot like a gym membership you rarely use. And second, what is the renewal rate? But we should really wait until September when the bulk of membership have lapsed. Perhaps that is why this transaction is delayed.

Jul. 07 2014 08:54 PM
Tal Barzilai from Pleasantville, NY

Bronx, I will support an expansion for Citibike as long as taxpayer dollars aren't used, but knowing this is from Bloomberg, there's always something hidden in it that makes taxpayers foot the bill, and I'm not anti-bike, I'm just being realistic here, which you aren't.

Jul. 07 2014 02:04 PM
Wilfried

"Sources close to the negotiations say REQX is in talks with the city to purchase a majority stake in Alta, the Portland-based company that currently operates New York's bike share system."

Why are negotiations with the city? If they were buying City Bike LLC, the Alta subsidiary that runs Citi Bike in New York, it would make more sense (though it's privately owned, so technically the city doesn't have a stake in it). But Alta is a company in Oregon that runs many bike share systems. Why is New York City at the bargaining table? What about the other Alta systems? If Alta is sold, this would affect them too.

Jul. 07 2014 11:54 AM
AMHess from Harlem

If the system is for the public benefit, perhaps it should be publicly funded. If a private "bailout" can be successful though, even better.

I'm on the fence about the parking revenue charge. Curb space is a limited resource and should be priced accordingly. On the other hand, bike stations are a very efficient use of curb space and most drivers already do not pay for curb parking.

Jul. 07 2014 10:06 AM
Bronx from NYC

Tal Barzilai, your poor anti-Citi Bike/bicyclist/pedestrian rhetoric is tiring.

REQX is a private company. Absolutely nothing to do with tax paper money.

Expect a Citi Bike expansion, new software, and an increase in the cost if annual memberships to approximately $150 dollars (still a deal).

SGreenberg, I agree. At the very least the city should drop the lost parking revenue charge. Absolutely ridiculous.

Jul. 07 2014 02:21 AM
Tal Barzilai from Pleasantville, NY

Brian, whenever I hear the word bailout, it usually involves taxpayer dollars like what used for the banks in the last recession that did involve taxes.

Jul. 06 2014 08:31 PM
SGreenberg from Brooklyn

Why don't we spend public money on this service? The city subsidizes private ferries with millions of dollars, and they serve a few thousand people a day. If that's a good use of public money, so is a bike share system that serves as many as 40,000 people per day.

Jul. 05 2014 06:33 PM
Brian Van Nieuwenhoven

Tal: REQX is a private company. They're making a private investment in the privately-held Citibike. That's not a bailout with taxpayer dollars. Who's being cheated by that? Why would you say that?

Jul. 04 2014 03:05 PM
Tal Barzilai from Pleasantville, NY

Don't give this program any bailouts. If they can't succeed on their own, let them fail on their own. Many were promised that no taxpayer dollars would be used for this, and now they feel cheated.

Jul. 03 2014 02:56 PM

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