As The Wall Street Journal reported earlier today, Citi Bike employees who run New York City’s bicycle-sharing program have won the right to unionize, a move that could bring the program’s 249 workers closer to the wages and benefits enjoyed by the city’s other transit workers. It would also have the probable effect of making the program, which has struggled, and thus far failed, to find its financial footing, more expensive to run.
Which, if it means the people who make bike share work will have the means to live in an increasingly expensive city, is not a bad thing. (It’s worth noting that workers have not yet voted to form a union, but following Wednesday’s decision by the National Labor Relations Board, could do so as early as next month.) But it is yet another indication that bike share may not be, as Bloomberg had promised, a money-making concern, or even a self-supporting one.
Citi Bike has the unusual distinction of being the only fully privately-funded bike share program in the country (or the world for that matter). And though Alta Bike Share, the Portland, Oregon-based company that launched Citi Bike and has run it since its inception, is on the verge of closing a deal to sell a 51 percent share in the company to REQX Ventures, an investment firm founded by upscale fitness chain Equinox and its parent, the Related Cos., the sale is not likely to fundamentally alter the profitability of the bike share program. (It will merely mean a temporary infusion of capital.) It’s also significant that REQX, which at first appeared on the horizon as a possible sponsor who would provide the funds for the program’s eagerly-anticipated expansion, is poised instead to come in as an investor. The distinction means that Citi Bike has thus far failed to find any sponsors besides those it launched with—Citi Bank and Mastercard—suggesting that the model in which the bill for the program’s eventual city-wide roll-out would be footed by private funds was not a realistic one.
But despite those financial difficulties, Citi Bike is thriving: in its first year, the program logged an astounding 8 million trips and sold some 105,000 annual memberships. Indeed, part of the program’s financial difficulties stem from the exuberance with which New Yorkers have embraced it, throwing the ratio of profitable casual users to unprofitable annual users out of whack. So perhaps it’s time that the city actually started treating Citi Bike like part of the city’s transit infrastructure and subsidized its use.
When we talked to Rob Sadowsky, the executive director of the Portland Bicycle Transportation Alliance earlier this spring, he pointed out that all transit systems are subsidized. “Should bike share pay for itself? I think those are very interesting and political questions,” Mr. Sadowsky said. “The numbers don’t pencil out for transit unless it’s subsidized.”
Given that the government subsidizes roads, highways, trains, subways, buses, ferries and even airlines, it’s unclear why bicycling should be the one exception, especially when its costs are so low compared to other transit systems. (Especially ferries.)
The next phase of expansion, which would bring the total number of bikes to 10,000 and is expected to cost approximately $20 million (and won’t happen this year), a pittance compared to the $4 billion spent on the World Trade Center transit hub.
The city has been rightly hesitant to pour funds into a program which has had serious software glitches and operational issues (Citi Bike has had difficulties rebalancing bikes as well as repairing and maintaining them to the standards dictated by its contract with the city), but the program has reached the stage in its evolution, as evinced by the potential unionization, where it’s no longer an experiment. It’s now a part of thousands of New Yorkers’ daily commutes, errands and social lives. And many more are clamoring to use it, and would, if the program expanded beyond a select group of Manhattan and Brooklyn neighborhoods. City council members representing diverse swaths of the city, from Ydanis Rodriguez in Upper Manhattan to Jimmy Van Bramer in Western Queens have told us that their constituents are hungry for the program’s expansion.
And while Alta has been tight-lipped about Citi Bike’s finances, it seems that the program might not require all that much financial help. An internal report leaked to Capital New York in April showed that while costs were $9 million over budget as of December, non-recurring start-up and Hurricane Sandy costs accounted for $6.4 million of that. And sales exceeded expectations by $3.4 million, suggesting that while the program might not make much money, with better management, it might not lose much money, either.
Unionized workers would add to those costs, of course, though not nearly to the extent that other transit unions have. And having a system that supports its workers, as well as more New Yorkers whose lives might be much improved by access to Citi Bike (there are numerous neighborhoods that are poorly served by existing public transit networks and as any G train rider knows, getting from Brooklyn to Queens and vice versa becomes an hours-long headache when the line shuts down), would be an enormous boon to New York.
Michael Bloomberg may have needed to promise bike share would be self-sustaining to bring it to a not very bike friendly New York, but times, and the city, have changed.
