Citi Bike Saved
Tuesday, October 28, 2014 - 01:30 PM
The bailout of Citi Bike will mean the number of bikes double — and membership will go up. (Kate Hinds) New York City's blue bike share system has a white knight. Bikeshare Holdings, a new investment venture, has closed a deal to purchase Alta Bicycle Share Inc., the Portland-based company that operates Citi Bike and similar bike share systems in cities including Boston, Washington D.C., Toronto and Chicago. The company will now move it's headquarters to New York City.
For riders, the deal means that the system's stalled expansion will start again. The system will add service in Upper Manhattan and many neighborhoods in Brooklyn and Queens, including Astoria, Long Island City, Park Slope, Red Hook and Greenpoint. And the number of bikes will double, from 6,000 to 12,000.
The deal brings not just a much-needed infusion of cash, but new leadership. Jay Walder, former CEO of the MTA, will be the new CEO of Alta Bikeshare when the deal is finalized. Another source of cash: increased annual membership fees. The membership is now $95 a year, and will rise to $149 — although when that hike is coming has yet to be announced.
The deal comes after a steady drumbeat of public dissatisfaction with Alta's management of Citi Bike. Despite the system's popularity, it's been plagued by software problems, finicky docks and stalled expansion plans. While Citi Bike has made improvements — it tweaked its kiosks to become more user-friendly — a WNYC analysis of Citi Bike data showed many early members were not renewing.
At a press conference held in front the Queensbridge Houses, near the rumbling above ground N train, Walder said that New York City's bike share program is one of the most heavily used systems in the world and its been that way from the beginning.
"What's even more remarkable though is that this has happened despite the frustrations that we all felt with the system," Walder added.
He said beginning this winter all bikes and docking stations will get an overhaul to prepare the system for the spring. In addition, he said this week the company will hire its first Vice President for technology. The unreliability of the Citi Bike App has been an ongoing serious problem for the program.
REQX, an investment firm founded by executives at real estate giant Related and fitness chain Equinox, had long been rumored to be buying Alta. The deal between REQX and Alta originally seemed to be on pace to close this summer, but negotiations went on longer than anticipated, said sources, because of the complexity of the deal. In May, Polly Trottenberg, the city's DOT commissioner, said, "I think Alta are not the easiest guys in the world to negotiate with."
But the players behind REQX are still very much in the mix. Bikeshare Holdings, the new venture, is led by the CEO of Equinox and the CEO of Related Companies.
In 2012, Citibank became the system's primary sponsor, with a $41 million, five-year contract; MasterCard also kicked in $6.5 million. But the launch of the program was delayed by software problems, which continue to plague the system, and its finances became precarious despite its booming membership.
The expansion won't happen overnight. More than 375 new stations and 6,000 new bikes will be added starting early next year. The first 1,000 of those will come online by the end of 2015, according to the Department of Transportation. But the new and improved network won't be complete until the end of 2017.
For riders, the deal means that the system's stalled expansion will start again. The system will add service in Upper Manhattan and many neighborhoods in Brooklyn and Queens, including Astoria, Long Island City, Park Slope, Red Hook and Greenpoint. And the number of bikes will double, from 6,000 to 12,000.
The deal brings not just a much-needed infusion of cash, but new leadership. Jay Walder, former CEO of the MTA, will be the new CEO of Alta Bikeshare when the deal is finalized. Another source of cash: increased annual membership fees. The membership is now $95 a year, and will rise to $149 — although when that hike is coming has yet to be announced.
The deal comes after a steady drumbeat of public dissatisfaction with Alta's management of Citi Bike. Despite the system's popularity, it's been plagued by software problems, finicky docks and stalled expansion plans. While Citi Bike has made improvements — it tweaked its kiosks to become more user-friendly — a WNYC analysis of Citi Bike data showed many early members were not renewing.
At a press conference held in front the Queensbridge Houses, near the rumbling above ground N train, Walder said that New York City's bike share program is one of the most heavily used systems in the world and its been that way from the beginning.
"What's even more remarkable though is that this has happened despite the frustrations that we all felt with the system," Walder added.
He said beginning this winter all bikes and docking stations will get an overhaul to prepare the system for the spring. In addition, he said this week the company will hire its first Vice President for technology. The unreliability of the Citi Bike App has been an ongoing serious problem for the program.
REQX, an investment firm founded by executives at real estate giant Related and fitness chain Equinox, had long been rumored to be buying Alta. The deal between REQX and Alta originally seemed to be on pace to close this summer, but negotiations went on longer than anticipated, said sources, because of the complexity of the deal. In May, Polly Trottenberg, the city's DOT commissioner, said, "I think Alta are not the easiest guys in the world to negotiate with."
But the players behind REQX are still very much in the mix. Bikeshare Holdings, the new venture, is led by the CEO of Equinox and the CEO of Related Companies.
In 2012, Citibank became the system's primary sponsor, with a $41 million, five-year contract; MasterCard also kicked in $6.5 million. But the launch of the program was delayed by software problems, which continue to plague the system, and its finances became precarious despite its booming membership.
The expansion won't happen overnight. More than 375 new stations and 6,000 new bikes will be added starting early next year. The first 1,000 of those will come online by the end of 2015, according to the Department of Transportation. But the new and improved network won't be complete until the end of 2017.
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Kate Hinds
Kate Hinds is an Associate Producer for WNYC News. She also reports for WNYC and Transportation Nation, a public radio reporting project that combines the work of multiple newsrooms to provide coverage of how we build, rebuild and get around the nation.
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