The Real Deal New York

Citi Bike needs millions to survive

Share program struggling after slow winter, lower than expected revenue
March 21, 2014 01:30PM

Despite becoming an increasingly familiar and popular sight on the Big Apple landscape, Citi Bike may soon fall apart unless it successfully raises tens of millions of dollars.

The bike share program’s survival depends on its appeal to tourist and expansion to new neighborhoods. Citi Bike leaders have reached out to officials in the de Blasio administration to that effect, pushing for a lift in the rates charged for the blue bikes’ use.

Polly Trottenberg, the city’s new transportation commissioner, told the Wall Street Journal that Citi Bike faces “a number of financial and operational challenges,” the details of which she did not specify. “We are working as diligently as we can to help the company resolve them and strengthen the program going forward,” she said before the City Council’s transportation committee in a March 6 meeting.

Among Citi Bike’s recent issues are equipment damage sustained during Superstorm Sandy, software glitches, a frigid 2013-14 winter that hurt ridership and a greater popularity with annual users than daily or hourly ones. Those long-term riders generate less revenue with the $95 per year plus tax that they pay to use the bikes than those who purchase a 24-hour pass, which costs $9.95 plus tax, or a $25-plus-tax seven-day pass.

The bike share program has also had to contend with lawsuits from a number of New York City residential buildings, which aimed to remove stations from in front of Petrosino Square, 99 Bank Street and Cambridge House at 175 West 13th Street. A suit regarding the station in front of the Plaza hotel remains in limbo.

Others in the real estate industry, however, have embraced bike share stations as a building amenity. Brokerage aptsandlofts.com added a function to its website showing listings’ distance from the nearest station in June of 2013. [WSJ]Julie Strickland