The Journal has a juicy scoop on Citi Bike, which is scrambling to raise tens of millions of dollars as the 10-month-old bike-share company has not earned enough to keep up with its high costs. The organization's main goal, sources said, is to raise rates, so it has asked the DOT for help and permission; however, it's important to note that Citi Bike is not asking the city for money and will continue to be wholly funded by private sources, like existing and potentially new sponsorships, and its own revenues.
Why is Citi Bike financially ailing? First, because the purchases of $95 annual memberships has increased and held steady, but tourists and other short-term users haven't been as eager with the more profit-padding daily ($9.95) and weekly ($25) passesand the snowpocalyptic winter certainly didn't help.
Further heightening Citi Bike's gap between revenues and expenses are operational costs. That includes payment to the staffers that move the bikes from rack to rack depending on where they end up at the end of the daysay, from Midtown to the West Villagetrying to meet demand based on morning commuting patterns. The WSJ also reports that the docking stations require 50 battery changes per night, requiring a subcontractor, which calls for more monies than expected.
DOT commissioner Polly Trottenberg has promised that the city will help the bike-share system become viable, but hasn't given any more insight into how that will happen without a infusion of public funds. One bright spot in recent Citi Bike news: at least most of the NIMBY-ish lawsuits against the bike-share company have been thrown out.
· Citi Bike, Needing Millions of Dollars, Looks for Help [WSJ]
· All Citi Bike coverage [Curbed]