Friday, October 25, 2013

Bloomberg: The Citi Bike program isn't profitable yet, but you should be happy

[This morning at 13th and A]

Mayor Bloomberg said yesterday that the Citi Bike program hasn't turned a profit yet some six months after the bike-rental program launched.

Per the Post:

“It is, I think, better than anybody had anticipated in terms of usage,” Bloomberg said during a press conference at the Department of Transportation.

“It’s a way to commute, it’s a mass-transit system that requires no federal, state or city monies whatsoever.”


The program is run in conjunction with NYC Bike Share, a subsidiary of Alta Bicycle Share, which designs and manages the massive system of docking stations.

“If they make money, we’re going to share in the profits,” Bloomberg said.

“So, you know, everybody should be happy with this.”


dwg said...

Happy? As a concept maybe a good idea, but Citibike riders are only adding to the huge number of delivery and average bikers that bike on sidewalks, ride against traffic, the wrong way in bike lanes and ride through stop lights and stop signs. They do not follow rules any better than other bikers. And please don't tell me most bike riders follow the rules. In the East Village? Uh uh.

Anonymous said...

So, it's all about profits and not about being green or "transportation alternative". Figures.

Alexander I. Edelman said...

What he isn't sharing, is who we'll be sharing the profits with. Citibank amd mastercard get the lion's share of all profits because they paid for the lion's share of the program. However, in their contract it also states that any expansion of the program has to be done with tax dollars. So when the program extends to the upper west, upper east sides and brooklyn new yorkers will be subsidizing a program with taxes they already have to pay to use, and citibank will be laughing it's way to the bank. Now, tell me again why we should be happy?

Anonymous said...

Also not profitable: bridges, roads, and infrastructure for cars. Taxes, license and registration fees pay less than 50% of the costs associated with driving. The rest comes from general tax funds, paid into by all citizens, regardless of whether or how often they drive.

bow boy said...

The only folks really profitting is Citibank. The free advertising never comes at a loss for them. Who outsmarted who? Corporate greed wins again. As always.

Anonymous said...

Please. It's already a ridiculous success. It's already made the streets much safer for everybody by putting more bikes on them and therefore slowing motor traffic (would you rather be hit by a box truck going 40 or a Citibike going 5, dwg?). I seriously doubt anyone's going to make any real money off of it. Shittybank's in it for advertising, and the omnipresent logos may grate, but it's a good deal for the city.

Henri Cervantes said...

i'd be happier if i could find a bike or a dock when i need one or the other.

Henri Cervantes said...

i'd be happier if i could find a bike or a dock when i need one or the other.

Anonymous said...

It's a great program, but it should be publicly funded. Being private is not its strong-point.

Ken from Ken's Kitchen said...

Once the cost of the investment is realized, there will be profit.

Anonymous said...

question: if it loses money, who pays to keep it running?

"Also not profitable: bridges, roads, and infrastructure for cars. Taxes, license and registration fees pay less than 50% of the costs associated with driving. The rest comes from general tax funds, paid into by all citizens, regardless of whether or how often they drive"

please enough with this bullshit anti-car money theory__please tell us if your ass gets hit by a taxi on your citibike what is going to pick you up? that's right, a ambulance and it needs the infrastructure for cars, roads and bridges to get around. Do you eat? you know everything you buy to stuff in your face has to use roads to get there. You wear clothing? same thing, we could go on and on how everybody uses and needs and should pay into "the infrastructure for cars"

Crazy Eddie said...

Colonel Saito: Be happy in your work.
From “The Bridge on the River Kwai"

Anonymous said...

I'm surprised it's not profitable, as the usage is high and just keeps increasing. Presumably CitiBank still hasn't made back its initial investment, but once that is recouped, I expect this will be profitable.

Even if it isn't profitable, it's still a good, at least once traffic laws begin being properly enforced for cyclists - for the environment, for quality of life in the city, traffic reduction and slowing, fitness of those who choose to cycle rather than drive, etc.

- East Villager

dwg said...

Anonymous 12:39

That's my choice? which would I rather be hit by? truck or bike? Never been hit by a truck. Already hit by bike riding through light. Not fast and no injury, but it's close to mayhem. So no, that doesn't make up for less cars and traffic. It's hazardous and needs better regulating and following of rules by bikers.

Anonymous said...

More bikes make streets safer for pedestrians, because it helps tame cars and trucks, which are what kill pedestrians, not bikes.

We sound like a broken record with this, but it just needs to be re-said because its important to our lives and the quality of our cities.

vzabuser said...

Crooked citibank accounting never shows a profit for the CITY, only profiteers ever - are the citibank natives!
Just like muni bonds, the only guaranteed income is in the fees making them.

Anonymous said...

At some point, probably soon, the program is going to expand beyond the lower half of Manhattan, because people want it everywhere. At some point, Citibank will go "Well we only agreed to pay X and we won't pay for this expansion." And the taxpayers will pay for it. And it will still be a good deal and dirt cheap compared to any other imaginable public transit program. Question is -- at that point, do the logos come off and we start calling it "Bike Share" or "NYCBike" or whatever? Or does CitiBank get cheap advertising in perpetuity, even after the taxpayer's paying most of the bills?

dwg said...

Anonymous 2:55-

More bikes make streets safer when they follow the rules. Right now in the East Village I'd say half do and half don't. That's a lot of "don't". Riding on sidewalks, riding the wrong way in bike lanes and streets is not a recipe for safety.

Honk! Honk! Where'd You Learn to Drive Anyway?! Honk! said...

@Anon 1:49 PM : Ambulances and delivery trucks don't need "infrastructure for cars", they need infrastructure for ambulances and delivery vehicles. No need for Joe Blow and his girlfriend to be blasting around in their car on those same streets.

Have you ever seen an ambulance or fire truck stuck in traffic with their siren wailing? Have you considered that the delay can easily mean lost lives?

Yes we need ambulances, fire trucks, police cars, and deliveries. No, we don't need able bodied folks zooming around in cars when they can use public transportation (or bikes, or walk) instead. And you say public transportation isn't good enough? Fine, they the pressure to make it better will come from making it required.

Anonymous said...

I am surprised a program this successful isn't turning a profit. Does anyone have access to any of the initial projections?

Also, I'd be perfectly happy if our streets were reserved for bikes, ambulances, buses, cabs and delivery trucks. No private cars means no private parking means you, rich person with car, may be out of luck but if you have a car why are you living here anyway?

Giovanni said...

Total financial losses to the city due to the CitiBike program's hidden costs are much greater when you add in the almost $5- $10 million in lost revenue so far for the MTA, not to mention unknown financial losses to taxis, and bike shops that have now lost almost all their bike rental business.

Parking revenue is also lowered due to docking stations in areas formerly metered. And cars that used to park in fee alternate side spaces now have to pay more to find a spot quickly.

However, the biggest issue as the program expands will be lost revenue to the MTA. Commuters have quickly figured out they could reduce their transportation costs by over 90% through bike sharing, which is over $1000 annually per commuter. And so the program took off.

And of course it did, they are practically giving the service away to the annual program riders. And this is the whole problem with the CitiBike business model: due to underpricing, daily riders and MTA commuters are heavily subsidizing the hipsters who have credit cards and can sign up for the annual plan.

To prove the point, a report out just this week shows that there are almost zero annual CitiBike members in NYCHA housing projects even though they get a discounted price of $60 per year. Only 0.5% live in public housing, the rest are living in six figure households.

The main reason is that people in public housing don't have credit cards, and ironically they are cut off from having credit cards by companies like CitiBank.

In fact, the study found that the average CitiBike rider is white and has a six figure household income. Metrosexuals from BroHo unite!

Even people of color who don't live in the projects and have valid high limit credit cards need to be careful since Barney's and Macy's might have them arrested if they buy an expensive handbag and also happen to be black. Unless their name is Jay-Z.

So if you don't have a credit card you can't get a CitiBike, but if you are a minority and use your CitiCard at Barney's you can get arrested.

The bad news for people in public housing is that Bloomberg has just signaled a future Citibike price hike in his comments about the program's lack of profitability, this in spite of the program' s record ridership numbers. If your business is operating at a loss, even Bloomberg can't make up for the losses on volume.

The problem is that the annual CitiBike rental price is obviously too low, so expect to see a sharp increase since even doubling the price still makes it a bargain. Plus they already have everyone's credit card!

Unfortunately Bloomberg never bothered to figure Citibike's underpricing and resulting cannibalization of true mass transit into his numbers, even though he knew that the MTA doesn't get a dime from it.

The result has been a popular program that loses money and decreases mass transit revenues. Brilliant. When the MTA ridership losses start to grow as the program expands next year, this will force more fare increases than would otherwise be required.

In the end poorer commuters who do not even ride Citibikes will be subsidizing the program, which is like a transfer of wealth from the working class people who live in public housing to the hipsters who live in the brand new condos across the street.

How come trickle down economics never seems to work, and yet trickle up economics always works so quickly?

Big Brother said...

A ridiculous success? Puh-lease bitch! What's ridiculous are the huge volume of bikes on the streets running red lights, cutting through traffic, riding on sidewalks and basically doing anything they damn well please without any type of policing or consequences. And you want to defend this?

Anonymous said...

7:24 Hey, not all of us live a bike-able distance from work OR live near safe or available transit. Some people have families- should we take 5 bikes out to go places because you have trouble understanding why we don't all bike everywhere? Should I put my 30 pounds of laundry on my bike with my kid and go the 2 miles to the laundromat even in rain and snow? You need to get to the outer boroughs and suburbs more if you think a bike is for everyone and everything-
I don't have to explain myself to you- you use a bike, I use a car/bike/transit depending on the situation.
Cars have been here since they were invented- we used to share the road with bikers/ bladers/ skaters, hell even horses and trolleys used to share the road with cars- now we have silly and inefficient traffic planning schemes (potted plants in the middle of the street?) that do nothing but slow everyone down.
A reasonable person can see how inefficient this plan has been- an efficient city means all citizens can move freely through the city- creating unnecessary obstacles is foolish and illogical.
All this hate was manufactured and stirred up by Emperor Bloomberg who wanted to recreate London and tolls to get into the city- he didn't get his wish so he started creating traffic jams by putting plants in the street, making inefficiently planned bike lanes, needless construction at peak hours/ days. He was hoping to get people to start shrieking for tolls everywhere so they could have their own private island and keep the poors out with expensive tolls.
Sad that people are falling for his schtick. It is a classic divide and conquer-

Dauphine of Nouveau York said...

Bikesharing in France cost less than €2. Here, well you guys know what it costs. So, only mostly the elites can "enjoy" these bikes. And they're thinking about raising the price so that it can be profitable? In other words, only the elites of the elites will be able to enjoy these corporate greenwashing machines. Montreal taxpayers had to bail out its bikesharing system. It's only a matter of time before the taxpayers will be bailing these toys for the riches. It's 2007 all over gain. Or 18th century France, tax the poor to pay the rich lives of the rich. Let them eat CitiBikes!

Never criticize a yunnie/hipster and their toys or appurtenance. This is a group of people who were raised with constant praise and that they can do anything, thus their overconfidence and overestimation of themselves. The way they ride the Citibikes is a reflection of who they are -- over-confident dilettantes, sense of entitlement, grandiose and believes that the world revolves around them, thus the not stopping at red lights, constantly ringing their bells to those who are in their way, regardless if these "hindrances" have the right of way. They have contempt for those who don't ride or against CitiBikes since they are beneath them. Citibikes, much like their foodie food and artisanal cocktails, gratify their infantile needs. Therefore, to them, Citibike is a success and will always be a success, even if it's not making a profit, enables two-wheeled maniacs and anti-social behavior.

Epic comment, btw, Giovanni.

Slow Down, You Move Too Fast said...

@Anon 9:48 : You mention the outer boros but note that this site you posted on is, nominally at least, local to the East Village of Manhattan. I know you folks in the outer boros have it bad and that's why I hope that public transportation gets much improved throughout the city. Manhattanites miss out on what's going on in the outreaches of Queens and Brooklyn, not to mention Staten Island and the Bronx, because it's such a pain to get there and back via public transit.

As for the "potted plants in the middle of the street" thing, you may not like it but it is based on data that shows that such traffic-calming features actually do work to save lives (and reduce injuries).

A quote from provides a clue:

"But narrowing streets isn't the only way to calm traffic. Traffic circles are an effective way to slow traffic at intervals, while actually speeding up overall trip time because they remove stop signs. Speed humps are raised sections of the road that are only comfortable if they're driven over slowly, and are one of the least-expensive solutions (not to be confused with speed bumps, which require coming to a near stop to cross). Sidewalks can be "bulbed out," both providing a place for landscaping and making the street less of a straight throughway. Bulbouts (also called curb extensions) can also be used at corners to shorten the walk for pedestrians crossing the street. We can define traffic calming broadly to include all types of measures designed to reduce the impact of motor vehicles on livability in surrounding neighborhoods."

There's 2 of 'em over there and another one in the corner and .. said...

@Giovanni : Your point about bike use cutting into MTA revenue is, I think, not likely in accord with actuality.

In 2012 there were more than 5 million subway rides and more than 2 million bus rides taken per day. How many bike rides per day would you estimate?

The Computer Made Me Do It said...

Uh oh. I forgot to include the URL that provides those MTA ridership figures:

Anonymous said...

Good grief. I'd be happier with less expensive rentals, nicer bikes, free hipster coffee with each rental, better bike lanes, more bike lanes, fatter bike lans, fewer salmoners, and Bill Blasio riding in Critical Mass. I don't really care about the profit, which is split anyway. Compared to other programs in the city transportation budget, the bare pennies "saved" through profit should be pennies invested in mo' bikes.

Anonymous said...

Ah yes, argue that the Citibike program is only affordable by the "elite" ($60 annual cost for those in public housing and members of the LES Credit Union) and that the city is infringing on car ownership on the other hand. And do it with a straight face.

This is the issue where NIMBY busy bodies with no time for facts can join forces with anti-green corporatists (at the WSJ) and garden variety reactive racists (at the Post). Yay alliances!

Giovanni said...

Let's do the math: The current CitiBike program is already at 1 million rides per month, let's expand that conservatively to 2 million per month as the program rolls out to uptown; ridership will be much greater than that when it reaches the other boroughs. That's 24 million lost MTA annual rides, or $60 million a year, resulting in over half a billion dollars in lost MTA revenue over 10 years.

And if the program keeps growing as expected, there would be well over a billion dollars in lost revenue over 10 years. Whether you're a billionaire or the world's richest city, that's still real money.

Bloomberg himself touts the program as new form of mass transit, yet it costs annual users 90% less than the cost to use regular mass transit. A monthly MTA pass is $112, or $1,344 a year, an annual CitiBike plan is $95. That pricing makes no sense, especially when it cannibalizes other revenues and is inaccessible to the poor.

Now we have a program that poor and working class people cannot access even with a 30% discount because of the credit card issue. And for hourly workers who cannot afford to be late to work, the docking system makes even less sense.

If the program isn't giving the city any revenue, is inaccessible to those who could actually benefit from saving a thousand dollars a year, and is just losing the MTA millions of riders per year, we'd be better off either increasing the program fess which looks likely, or else giving people a tax credit or voucher to buy their own bikes,

This would let us restore the thousands of lost parking spaces, install more regular bike racks which are in severe shortage, and generate some more business to local bike shops. Right now it's just a blatant giveaway to hipsters and white six figure income households, and a financial drain on everyone else. Or what Bloomberg likes to call a big success.

Anonymous said...

Ah yes, the argument of a narcissist who can't see out side of themselves and can't stand not being praised. Don't you read "the average CitiBike rider is white and has a six figure household income". Oh, wait, You let Citicorp and daddy Bloomberg read for you, kid that you are.

Anonymous said...

"More bikes make streets safer for pedestrians"??? I've been run over by more bikes (2) than I have cars (0). Admittedly, one incident was my own negligence still getting used to bike lanes, but hit twice none the less.

Andrew Tyndall said...

Giovanni says "Let's Do The Math"


He assumes that every ride on a Citibike is a journey that would otherwise have used mass transit. None are substitutes for walking, nor for taxis, nor for private cars, nor for personal bicycles.

None are trips that otherwise would never have been taken.

He ignores the possibility that Citibikes and mass transit could be used in tandem -- using the Citibike to extend a trip that was taken by transit. Why does he think that the racks are so empty at Penn Station during the morning rush? Because commuters are extending their mass transit trip with a bicycle.

He ignores the probability that many of those substituting a mass transit trip for a Citibike ride will have unlimited use Metrocards: so no revenue is lost to the transit system, yet congestion is relieved. Actually a positive.

Anonymous said...

"silly and inefficient traffic planning schemes (potted plants in the middle of the street?) that do nothing but slow everyone down."

Slowing everyone down is a good thing. Too many drivers are driving far above the local speed limits. Slowing down the entire city is a good thing, for safety, noise, quality of life.

"There is more to life than increasing its speed" - Gandhi.

- East Villager

Anonymous said...

Definitely agree that private car usage within cities has to be reduced. Public transit, deliveries, service vehicles etc should be the main reasons for the road usage.

A simple way to reduce private car usage would be to properly tax fuel for private automobile usage more in line with its real cost, as is done in Europe. There can be reductions for those who require fuel for work use.

- East Villager

Benny from da Bronx said...

Andrew Is missing the point: Everyone I know who rides a bike including me has dropped their monthly Metrocard, this goes for people using CitiBikes too. We basically use the bike instead of mass transit whenever the weather is good, and on the bad days will use the bus and subway. But most of the time we use the bike and save lots of money, which is Giovanni's whole point.

So even if you reduce his figures by 80 percent it's still hundreds of millions of dollars the MTA will eventually lose out on. Anyone buying an annual plan is not a tourist or occasional rider, they are a commuter, and what about all the poor people Bloomberg said would be helped by the program?

Unless you have a credit card forget it, so this is a big giveaway to the yuppies and tourists. As for me I'm saving over a thousand bucks a year cycling, and I have never seen so many bikes on the street before, so mass transit is definitely losing a lot of money no matter how you want to spin it,

Anonymous said...

Quite a thread. I am pro citi bike. I think Citibikers very rarely are the ones biking super fast through the EV. That's because they don't go that fast.

I hear the complaint that this serves only the affluent. But I have to agree also. My biggest problem with the program is that there aren't enough bikes or slots sometimes.... I love it....

Anonymous said...

I don't use Citibike for my commute. Use it for everything else. i can confidently say that the only substitution is citibike for cab fares. And its a lot of cab fare i am saving....

Anonymous said...

A few pros about Citi Bike

Citi Bike has improved accessability to once inconvienent parts of the city (Waterfront areas for example).

Bicyclist are more likely to stop and utilize local business than automobile drivers. More commerce.

Many people that otherwise do not exercise are getting that time in.

Great alternative to a cab, you slide past traffic. Cheaper.

One more biker is one less person on a subway, bus, cab, or private car.

More bicyclist, more awareness by drivers. Benefits everyone.

The amount of parking removed to implement the program was minuscule (and the revenue lost from those spots doesn't compare to the above benefits).