An investment firm formed by the Equinox gym chain and parent the Related Companies may soon rescue ailing Citi Bike.
Alta Bicycle Share, a Portland, Ore.-based company that runs the bike share program, is in talks with investment firm REQX Ventures to pump much-needed cash into a planned expansion of the program. The planned investment, for which both parties have reportedly signed a term sheet, would also fund software improvements.
The exact amount of the capital to be invested in the program was not immediately clear. It’s also unknown whether REQX would receive an ownership stake in Citi Bike in return for the bail out.
If the two sides do manage to come to an agreement, city officials will have to approve the deal, sources familiar with the situation told the Wall Street Journal.
Though more than 100,000 New Yorkers have paid the $95 annual membership for the bike-share program, those users generate less revenue than those who use the bikes on 24-hour passes, which cost $9.95 plux tax, or those who pay $25-plus-tax for a seven-day pass, as previously reported. The program has also faced hurdles on the personnel front, with program head Justin Ginsburgh resigning in March amid “financial and operational challenges” at the program. [WSJ] — Julie Strickland