New York City officials are throwing a roadblock in front of a plan by the Portland, Ore.-based company that runs Citi Bike to raise the annual membership fee for the bicycle-sharing service, potentially starving it of millions in revenue heading into the spring sign up period. So reports the Wall Street Journal, relying largely on unnamed sources.
Citing higher than anticipated usage by its 102,000 annual members and sagging demand from daily and weekly users, Alta Bicycle Share Inc., which runs Citi Bike through its subsidiary NYC Bike Share, says it needs to raise the annual fee from $95 to $140, a 47% hike. If every annual member renewed, that would add $4.6 million to the $9.7 million in revenues they contribute annually.
City officials have balked at that plan, insisting that Alta first secure financing to expand the program and upgrade the software that runs it. The firm says it doesn’t need the city’s blessing to raise rates, but the city contends its consent is required. The WSJ says it FOIL’ed the contract and cites language backing both the city and Alta’a positions.
While it appears that Alta is in a Catch 22, wherein the city is pushing it to grow without public support while hobbling its ability to attract private investment by denying it the ability to raise rates as needed, sources say it is on the cusp of securing the $14 million in funding it needs to put another 10,000 bicycles on the road.
During its first year, Citi Bike — as forecasted — broke even, according to Alta CEO Michael Jones. It currently makes about 6,200 bikes available in Manhattan below Central Park and in parts of Brooklyn.
While the WSJ sees the “ball in Alta’s court,” it also notes that a drawn out dispute with the city as the weather gets warmer could cost the firm potential revenue. Citi Bike’s annual memberships start coming up for renewal on May 27.
Alta Bicycle Share also runs bike sharing programs in Washington DC, Chicago, Boston, Chattanooga TN, Columbus OH, Portland, San Francisco, and Melbourne Australia.
To read the full Wall Street Journal article cited in this story, click here