U.S. Bike-Sharing Programs Hit A Speed Bump

Staying afloat means getting creative about drumming up cash.

The number of U.S. cities with bike-sharing programs has exploded from six to 36 in the past four years, promising residents and tourists a convenient, healthy, environmentally gentle way to get around. But how robust are these programs?

So far, not very. More than half have hit stumbling blocks, according to a report in the Wall Street Journal.

New York--home to Citi Bike, the country’s largest program, with 6,200 bikes--has struggled to make ends meet after faulty software and property damage inflicted by Hurricane Sandy ballooned its budget. (According a report obtained by Capital New York, the program could have been barely profitable in its first year, absent the weather-related setbacks.) Moreover, the aggressively branded program--Citibank is paying $41 million over five years to be the title sponsor--has deterred additional corporate backers.

Programs in Chattanooga, Tenn., San Francisco, and Washington, D.C., have also reported setbacks or delays, as civic leaders experiment with business models that typically include some combination of annual memberships, day passes, corporate sponsorships, grants, and public funding.

“The business model is still under development. Some of it is trial and error," Susan Shaheen, who researches sustainable transportation at the University of California, Berkeley, told the Wall Street Journal.

Undeterred, cities from California to Rhode Island are plowing ahead with plans to introduce programs of their own.

Operators of profitable programs say that creative business development and a bit of patience are the keys to success.

“You've just got to hustle and just get as much money as you can," James Waddell, executive director of Boulder B-Cycle in Colorado, told the Journal. B-Cycle has been growing steadily for the last three years and posted a budget surplus last year. Of its $472,605 in revenue for 2013, roughly one third came from public funding, followed by memberships (22%), sponsorships (16%), grants (15%), and other sources of funds.

In New York, a rumored deal that would stabilize Citi Bike--as well as impact programs in the Bay Area, Chattanooga, and a handful of other cities--has yet to be confirmed.

[H/T the Wall Street Journal]

[Image: Citibike via Shutterstock]

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2 Comments

  • Mehrdad Majzoobi

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