NYC Citi Bike Millions of Dollars In the Red?

It has been widely reported that New York City’s City Bike needs millions of dollars to put the blue bike-share system back in the black. Hard hit by this long winter, equipment damage from Super Storm Sandy, and computer glitches that made it difficult for tourists to rent bikes for a day, Mayor Bill de Blasio said Friday that the bailout won’t come from the wallets of New York City taxpayers.

“At this point, city budget money is not on the table,” he said. “We will collaborate with them to help them find ways to be more efficient and more effective.”

Some might applaud the well-known progressive for drawing the line in defense of tax payers, but given the amount of money coming from tax payers wallets for every other mode of transportation I hope the Mayor changes his mind. Citi Bike is the only bike-share system in the country that does not get any public funds. But it might also be the only transportation system in the country that relies entirely on user fees and sponsorship, every other system, from walking to transit to driving is subsidized by tax payers.

The harsh winter cut down on Citi Bike rentals.

Despite the problems with the business model, Citi Bikes have become an integral part of the way New Yorkers get around and I think it is worth some investment of public funds to help them get over this hump.  Streetsblog is reporting that Mayor de Blasio is hoping that Alta Bike Share, which runs Citi Bike, can find private money to fill the funding gap in the nation’s only large bike-share system not to get public funds. In the same article, writer  makes the case for using public funds to save the immensely popular program given Citigroup already kicked in $41 million over 5 years to get naming rights.

“After all, the city subsidizes the East River Ferry, which averages 3,200 daily riders, but not Citi Bike, which was averaging 35,000 daily riders in November and consistently exceeded 10,000 daily rides in the winter. The approximately $2.5 million that goes to ferries could benefit more people if it was spent to bolster Citi Bike and expand it into working class neighborhoods.”

In that perspective, kicking in some public funds seems pretty reasonable to me, after all, despite what you often hear, virtually every transportation system is heavily subsidized by tax payers. I can’t count how many times I have had to refute the “people who ride bikes don’t pay for the roads” argument. I have repeatedly tried to debunk the myth that gas taxes and registration fees cover the cost of driving. Even the most conservative estimates show tax payers subsidize the cost of the automobile travel by 50% since 2007, as the chart below illustrates.

This chart shows that our highway system is subisdized by non-user fees through bonding and direct transfers from the general fund to the tune of 50%.

Further, Bixi and Citi Bike have simply joined the not-so-exclusive Unsustainable Transportation Club, that includes members like the Federal Highway Administration and the State of Wisconsin Dept. of Transportation. The Federal Highway Administration predicts our own national Highway Trust Fund will be in the red by August of this year: “Based on current spending and revenue trends, the U.S. Department of Transportation estimates that the Highway Account of the Highway Trust Fund will encounter a shortfall before the end of fiscal year (FY) 2014.” Some state DOTs are estimating we could be in the red as early as June.

Because people are driving less and cars are getting better fuel mileage, the Highway Trust Fund is projected to run in the red before the end of this year.

And what is the most likely solution to the Highway Trust Fund problem? Are our leaders looking for a sponsor or to raise user fees like the gas tax? Nope, even money says Washington will give the Highway Trust Fund a multi-billion dollar injection of public tax dollars from the general fund to keep it afloat. Don’t be shocked, this happens all the time at the federal level and even here in Wisconsin. After all, over the last wo budgets, Wisconsin has made similar transfers of hundreds of millions of tax dollars to supplement Over the next ten years in Wisconsin, the funding gap between our transportation funding sources and estimated costs of roadway repairs and maintenance varies between $2 billion and $18 billion.

Maybe NYC should have chosen B-cycle for their bike-sharing program.

There is a “devolution” move by a couple of Tea Party members to cut virtually everything from the FHA budget except funding for the interstate system, but that bill seems little more than a statement of principle. In the extremely unlikely event that U.S. Rep. Tom Graves & U.S. Sen. Mike Lee manage to pass their Transportation Empowerment Act in Washington, I will be willing to listen to user fee funding arguments, but until pigs learn to fly, we will have to accept a certain level of public subsidies for all our various modes of transportation, from driving to walking and everything in between.

So while I wish Alta Bikeshare good luck seeking new sponsors and rate increases above the 24-hour and weekly prices of $9.95 and $25 respectively, I would hope that NYC Mayor Bill de Blasio will budget for a transfer of some public funds to keep the incredibly popular blue bikes from turning red. Or maybe they should turn red, since the equally popular red B-cycle systems in Madison and other cities seem to be on solid financial ground!

Last week Madison B-cycle kicked off its fourth year of operation with six new stations, 35 stations total, and 350 bikes There will also be new membership options that will be payable in monthly installments.



About Dave Schlabowske, Deputy Director

Dave was the first full-time staff member hired to open the Bike Fed's Milwaukee office 15 years ago. A former professional photographer and life-long Milwaukee resident, Dave likes wool, long rides, sour beer, and a good polar vortex once in a while.

8 thoughts on “NYC Citi Bike Millions of Dollars In the Red?

  1. I beleive Miami Beach’s Decobike does not receive any public funds either. It also happens to be the most expensive bike share system in the USA by a long shot. An annual pass would cost you $180.

    • Ah, you are correct Craig, and Decobike is expanding to San Diego too. They have a very different business model that is more of a traditional bike rental system that also kinda works like a bike-share system. I will be curious to see how they do in San Diego, which has a much lower density of tourism than Miami.

  2. We’re working very hard to position Milwaukee Bike Share for long-term success and to avoid reliance on a few sources of financing. We have attracted support from not only the City of Milwaukee and the State of Wisconsin but from a very broad base of private entities (foundations, BID districts, property owners and corporations).

    We are hoping to soft launch additional stations this summer (beyond the current Discovery World demonstration) with more stations launched later this year and early next. We also plan to announce a system name in the next months. Follow the Bike Fed blog for this exciting news and more updates on our progress.

    Ride on,

    Kevin Hardman
    Launch Director
    Milwaukee Bike Share

  3. CitiBike gets used a lot. During a trip to NYC this year, I was shocked to come across so many huge bikestations with only a couple of available bikes. All sorts of people riding them all over the city. Then the racks would fill up late at night, only to empty out the next day. Unfortunately, long conditioning has led taxpayers to believe that roads are either free or profitable for car use, and so they think other modes of transportation should “also” be free or profitable, also. Until people realize roads and highways cost money, it’s an almost impossible battle. It’s a level of ignorance that is tough to address.

    • Walking is probably the most subsidized mode of travel since there are no user fees. For instance you don’t even need a trail pass to use state trails if you walk (you do to bike or ski). Funding for sidewalks is not tied to users at all. I pay for the sidewalk around my house with property taxes.

  4. Pingback: Bicycle groups want taxpayers to foot the bill for Citi bike rentals | motorists for smarter vulnerable users

Leave a Reply

Your email address will not be published. Required fields are marked *