Free-wheeling trouble for New York's bikeshare system

2014-04-04 10:39
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New York - New York's bikeshare program may be hugely popular with just over 100 000 annual members but after operating less than a year, it is desperately searching for a $14 million (R148m at R10.65/dollar) investment.

A long, freezing winter may have put the brakes on all but the most fanatical of cyclists, but with the arrival of spring the bikes' royal blue livery will once again become omnipresent.

Since their launch in May 2013, Citi Bikes have traveled 11.26 million kilometer.

In good weather, they make an average of 36 000 trips a day although that figure dropped to 8 000 during an icy February.

Bad omens have not come true: there have been few injuries and no deaths as the bikes jostle for space with pedestrians, taxis, cars, trucks and delivery men in the city that never sleeps.

But while the scheme will celebrate its first anniversary next month, officials admit they are on the hunt for new investors - and millions of dollars.

"Our parent company, Alta Bicycle Share, is seeking investment that will allow us, Citi Bike, to expand to 10 000 bikes," NYC Bike Share spokeswoman Dani Simons told AFP.

"That would cost about $14 million (R148m)," she said. ABS "is also speaking to investors about a variety of possible investment opportunities."

- No New York bailout -


In New York, unlike most cities, the network was set up on the grounds that it would cost the taxpayer nothing.

The first sponsor, Citigroup, paid $41 million (R436m) over five years to have its logo on 6 000 bikes and 332 stations in southern Manhattan and various parts of Brooklyn.

That was supposed to be a first step before the scheme was widened to 10 000 bikes and nearly 600 stations in a larger area.

But maintenance turned out to be more expensive than anticipated.

Technological problems sometimes shut down bike stations or prevented riders from paying by bank card.

What's more, the director general of Citi Bike, Justin Ginsburgh, resigned recently. And in January, the Canadian company Bixi, which makes the equipment and technology, went bankrupt.

If annual membership, at $95 (R1 010), exceeded expectations, then the rates of $35 (R372) a week and $9.95 (R105) a day, mainly targeting tourists, have been disappointing.

"It was our first year, we didn't have a lot of time to deal with marketing," said Simons. "We'll be doing more this year."

While waiting for more funding, expansion projects risk remaining on ice. No date for any such plans has been set, she acknowledged.

Citi Bike has discussed raising rates but so far no decision has been made.

Officials confirm they have not asked New York for money.

"At this point, city budget money is not on the table," New York Mayor Bill de Blasio said. "We will collaborate with them to help them find ways to be more efficient and more effective."

Transport Commissioner Polly Trottenberg has been frank.

"We all know Citi Bike has been tremendously popular with New Yorkers. But there have been significant financial and operational issues," she said in a statement.

She listed those issues as a need for more effective redistribution of bikes and technology problems resulting in malfunctioning stations and failed credit card transactions.

"We expect the system's operator, NYC Bike Share, to resolve these issues so the system can perform effectively and ultimately expand," she said.

"Everything is on the table for Citi Bike, from improving operations to new sponsorships, to additional financing."

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Read more on:    new york  |  travel  |  travel international

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