As we probably all recall from BIP, Citi Bike, one of NYC’s first and largest bike share programs, was mired in a plethora of financial issues during its expansion phase. Many believed the program would soon cease to exist, but to everyone’s surprise, the project is finally ready to expand.
A social venture initiated by the New York Department of Transportation in 2013, the Citi Bike Share Program now have over 330 stations operating over 6,000 bikes and boasts almost 980,000 subscribers. Although the project has been able to gradually ease into the NYC culture and become part of the city life, it can only be deemed a mixed success at best: despite it remained operational, it had no means of expanding, until now.
This Tuesday, the situation changed as Jay Walder, the former head of the Metropolitan Transportation Authority, was named chief executive of Alta Bike Share, the company responsible for maintaining the well-being and growth of Citi Bike. Walder’s vision is to double the number city bikes available by 2017 and have them present in dozens more neighborhoods throughout Brooklyn, Manhattan, and Queens.
To finance this, Citibank will invest an additional $70.5 million in exchange for extending its licensing with Alta by 5 years until 2024. Furthermore, annual membership will also rise by almost 60% from $95 to $149, but Alta promises more package options to come, such as seasonal passes.
Personally, I feel that while this is the right move for Citi Bike’s big next step, the sustainability of this decision is uncertain. The big question will be whether Citi Bike can sustain an expanded program that would require even higher maintenance cost given that it already experiences some difficulties maintaining its current system. In addition, aside from Citibank’s continual investment to fund its every additional expansion, what can Citi Bike do to ensure a secure pool of funding it could use for further development? Although there are no immediate solutions to these questions, let’s just be content that Citi Bike will stay at least for a couple more years.