New York City’s ambitious bike share program, which was touted by former Mayor Michael Bloomberg and backed by Citigroup, is in deep financial trouble, the Wall Street Journal reports.
The program, which opened to the general public last June, is struggling to generate interest from tourists and has suffered from computer glitches and logistical problems, all of which has created the need for tens of millions of dollars in extra funding just to keep it afloat.
The bike-share program faced “a number of financial and operational challenges,” said Polly Trottenberg, the city’s new transportation commissioner, earlier this month, according to the Wall Street Journal.
Citi Bike has nearly 100,000 annual members who pay $95 for a year’s worth of unlimited 45-minute rides. But the program has generated very little interest from tourists and other short-term users.
Operated by a group called NYC Bike Share, which is itself owned by Alta Bicycle Share, Citi Bike offers 24-hour and 7-day access plans. Those plans are relatively more expensive at $9.95 for the day plan and $25 for the week plan.
Besides having a hard time attracting those customers, Citi Bike faces the problem of manually changing out batteries at the 330 docking stations located throughout the city. A subcontractor was hired to do the expensive work, the Wall Street Journal reports and also notes that the program’s financial struggles have led to some layoffs.
The Citi Bike program was both widely touted and criticized during its development through 2012 and 2013.
Mayor Bloomberg championed the program as an environmentally-friendly way to help New Yorkers and its 50 million-plus annual tourists get around the city. Others have complained that the bike program is discriminatory. Alta, the program’s operator, places a 260 pound weight limit on bike riders, though officials have said that the limit will not be strictly enforced. Others have argued that the program is not easily-accessible to minority customers given the locations of the bike stations.
Bloomberg also highlighted that the program is entirely privately funded. But the Wall Street Journal notes that extra financial backing may be hard to come by given that the Citi Bike program is so closely identified with its namesake Citigroup. The bank provided $41 million in seed capital to get the program off the ground, and the 10,000 bikes all bear the company’s logo.
MasterCard is also a contributor to the program, providing payment services as well as $6.5 million in financing.
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