City Doubles Bike Sharing Program As Urban Sustainability Initiatives Thrive

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Bike sharing in New York City has had a promising yet problematic start, but there is little question that it is a program worth keeping and expanding. It is clear that the de Blasio administration agrees and, in one of their first efforts to expand former mayor Bloomberg’s sustainability agenda, are about to double the size of the city’s bike sharing program. Bloomberg’s legacy complicates de Blasio’s task. As Matt Flegenheimer observed in a NY Times piece on Citi Bike, “Mr. Bloomberg’s successor, Bill de Blasio, has been confronted with a … consequential choice: how aggressively to embrace—and reimagine—a program that remains inextricably linked to the last administration.” His answer, fittingly enough, is to expand the program in the city’s outer boroughs.

The great virtue of bike sharing programs is that they expand the mass transit system. Photo credit: Wikimedia

Last week, the Wall Street Journals Andrew Tangel reported on a potential investment in New York’s Citi Bike program by REQX Ventures, an affiliate of New York City and global real estate giant Related Companies, and Equinox Fitness. According to Tangel, REQX Ventures:

… is close to hammering out an agreement that could enlarge the footprint of Citi Bike to upper Manhattan, into Queens and further into Brooklyn over the next few years, these people said. The number of bikes would nearly double, from 6,200 to about 12,000. The pact would allow Citi Bike’s operator, Alta Bicycle Share Inc., more flexibility in raising the price of the $95 annual memberships, which could increase to $140 or more, these people said. More than 100,000 annual memberships have been sold.

As part of the tentative agreement, REQX Ventures would secure a controlling stake in Alta, these people said, thrusting the Related affiliate to the forefront of a budding industry spreading across the U.S. Alta, based in Portland, Ore., runs bike-share and rental systems in cities from Boston to San Francisco.

As Tangel reports in his piece, New York City’s bike sharing program is unique because it does not rely on a public subsidy, although a contract with the city governs the program and has provided access to public space for bike rental stations. The original contract made inaccurate assumptions about the mix of resident and tourist rentals and:

Alta’s original contract was ambiguous about whether the company could raise Citi Bike rates without city approval. Because the city wouldn’t let Alta raise prices without first lining up new capital, Citi Bike’s operator has left potential revenue on the table as it awaits a new agreement, current members renew and new ones sign up. Alta has said its $95 annual memberships were money-losers because riders used the bikes twice as much as projected.

The potential for attracting additional private capital to New York City’s bike sharing program is significant and has been a test for the de Blasio administration. If public-private partnership is to thrive around urban sustainability issues, government needs to understand how to work with private developers like Related. Under the Bloomberg administration, that knowledge was assumed to be in place—even if it wasn’t always present. Corporate leaders knew that the final decision maker in the deal was someone who came from their world: Mike Bloomberg. They do not know that now; Bill de Blasio has spent his career in public service. However, these early efforts at public-private partnership have begun to set a positive tone for relations between our progressive mayor and New York City’s private sector.

Actually, if the current administration can’t work with Related, it will be hard to imagine success with other developers. Fortunately, there are clear signs that the new administration gets it. They have already demonstrated an ability to work with private developers on affordable housing. Bike sharing is providing a high-profile opportunity to work with industry on sustainability issues. The success of this deal could lead to other opportunities as well.

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