Only a few months ago, Citi Bike was said to be in serious financial trouble, with the pro-car lobby and sensitive aesthetes licking their chops in eager anticipation of its demise. Today, the Wall Street Journal reports the opposite—that Citi Bike is gearing up for a multimillion dollar cash infusion, and it's not moribund at all!
REQX Ventures, an investment firm comprised of people affiliated with Related Companies and Equinox gyms, has been in talks with Alta Bicycle Share for several months now, but the paper reports that a deal worth "tens of millions of dollars" will be closing within the week. Squee! But what does this mean for Citi Bike, and more specifically, its users?
For one thing, the partnership would enable the program to finally expand to neighborhoods long underserved by the big blue bikes—upper Manhattan, southern Brooklyn, Queens...in general, with the number of bikes doubling from 6,200 to about 12,000.
But while the windfall would give Alta Bicycle Share more flexibility over its price structure, it won't necessarily prevent the cost of a membership from rising—the currently $95 annual fee could inflate to $140, which in turn would mean a potential $4.6 million in additional revenue per year. While the heftier price tag would certainly deter some members from renewing, it goes without saying that expansion of the program would also lure many more in.
Citi Bike declined to comment on the deal, and a spokesman for Mayor de Blasio said only that "we're committed to making New York City's bike share program more reliable and more accessible to neighborhoods across the city. Citi Bike has become part of our public transportation system, and there is a lot riding on its success. We owe it to New Yorkers and to riders to get this right, and make sure we put the system on solid footing for the long-term."
While it's unclear precisely how much capital REQX would invest in Alta Bicycle Share, it's apparent that improvements and upgrades are badly needed if Citi Bike can truly be considered a success. As Transportation Alternatives Executive Director Paul Steely White said earlier this month: "The system needs to be better capitalized and it does need an infusion of capital to replace the software system, bring their operations to an acceptable state and restore confidence in the system."