CitiBike Is Already Considering Raising Prices to Combat Losses
To stop the cash hemorrhage, New York City's CitiBike program is considering raising its prices less than a year after its debut. The problem, as The Wall Street Journal describes, has more to do with tourists than with New Yorkers.
.To stop the cash hemorrhage, New York City's CitiBike program is considering raising its prices less than a year after its debut. The problem, as The Wall Street Journal describes, has more to do with tourists than with New Yorkers.
About 99,000 people have purchased year-long bike passes for about $100, a number higher than what most expected. That suggests that New Yorkers are happy and willing to support the bike-share program for everyday activities around NYC. However, the 24-hour bike passes selling for a little more than $10, which largely target tourists and are the real money-makers, haven't sold nearly as well. Neither have one-week passes. Whether because of issues with the paying system, kiosk glitches, or just general confusion, tourists haven't flocked to shell out for the bikes. A particularly brutal winter didn't help sales either.
While it's important that native New Yorkers have taken to the blue behemoths, CitiBike still needs to make money to survive given that it does not currently take public funds. It will need tourist cash to break even, and it hasn't done a great job of that so far. In addition, Bixi, the Canadian company behind Citi Bike in New York and other North American cities, declared bankruptcy in January. And unexpected operational costs, including replacing batteries at stations every night and moving bikes to higher-use areas have proved more expensive than expected.
CitiBike is proposing a few solutions. For one, it can raise prices, though that will of course lower some demand for the bikes. A more profitable solution could come in the form of more advertising along with CitiGroup. The program is also considering improving its appeal to tourists and expanding into new neighborhoods. As a last resort, CitiBike could choose to accept public funds to support the program, but that's still a long way off. "We're not there yet," transportation commissioner Polly Trottenberg told The WSJ. "We need to make sure that the current system is stable and has a good, viable operation."