I can now tell you that I'm a proud Citibike annual member, and I've been enjoying it. The biggest advantage is being able to use all that great Manhattan bike infrastructure without having to go through the inadequate bike infrastructure to get to it. The Ninth Avenue bike lane was installed in 2007, and I still haven't used it, because I haven't wanted to ride across from the Queensboro Bridge on 55th Street. With Citibike, I can take the subway to the West Side, or to Greenwich Village where the streets are calmer. I still haven't ridden the Ninth Avenue lane, but I have ridden the Eighth Avenue one.
repeats the claim that the expansion will have to be paid for by the government. There is no explanation; it's just treated as though it's obvious, and then people move on to the question of where the government will get the money.
It's not obvious to me, though. Imagine a private bike rental business with five locations. The business can expand without money from the government. All it has to do is earn a surplus that the owner reinvests in new locations. The owner can even make a bet on future success by taking out a loan to pay for expansion. If Citibike can earn a surplus, it can do it too.
Is Citibike earning a surplus? I haven't seen anything one way or another. There are three main possibilities. It could be running a deficit and burning through the initial Citibank outlay of $41 million plus the Mastercard $6.5 million. It could be earning a surplus, but not enough to expand at any significant rate. Maybe it's not at a surplus yet. Or maybe the surplus is going to something other than expansion.
It turns out that we can actually estimate quite a bit. We know, from the Citibike website, that as of Sunday there were 69,830 annual memberships. The rate at which new people are joining is constantly dropping, as is standard, but the system may get up to a hundred thousand members a year, bringing in $9.5 million. There are about 1500 24-hour passes and 150 seven-day passes sold per day on average, earning $18,750 per day, which will come out to about another six million dollars a year, allowing for weather conditions. So the total membership income for the year will probably be around $15 million, which dwarfs the $10 million per year that the city gets from its sponsors.
So what are the expenses? According to this article, Bixi costs $400,000 Canadian a year to run 1800 bikes in Toronto, for an average of $222 per bike. Everything's more expensive here, so let's say $1.5 million a year for our 6,000 bikes. That means that we could pay for the the system out of 24-hour passes, or that it broke even with annual memberships before it even launched. Or about $23 million in profit, which is split between the city and Alta, leaving $11.5 million a year for expansion.
(Interestingly, this means that we don't actually need sponsorship; even without it, the city would still be on track to earn $6 million a year from the deal.)
The next question is how much expansion we can get for $11.5 million. Alta got $47.5 million from the sponsors, a $42 million loan from the vampire squid, and $5 million from its insurance company, for a total of $92.5 million. But a lot of the equipment was damaged by Hurricane Sandy, and it's not clear how much the bikes currently in use cost.
That said, before Sandy hit Alta told its insurance company that it had $20 million in equipment on the ground, so let's assume that that was for 7,000 bikes. That means that for $11.5 million we could expand the system by more than half its planned launch size - 3,500 bikes - every year.
To me that suggests that by this time next year I could be riding Citibikes from the Upper West Side to Long Island City to Bed-Stuy to Red Hook. In 2015 I could ride from my house to Tremont to Inwood, and south to Ridgewood and Brownsville. In 2018, who knows?
Feel free to go over my "back of the envelope" and point out anything that doesn't look right. But if I'm right, we don't need government money to expand Citibike. We only need it if we want to speed up the process. And you know, if we're spending $800 million to widen a bridge that carries hardly any transit, I have to wonder if we couldn't find a hundred million for Citibike expansion. Imagine what that would get us.