by Lisa Fickensher, Crain’s New York Business (June 24, 2012)
The city’s vast bike-share program, launching in July, will join an expanding sea of bike shops and rental businesses taking advantage of the Bloomberg administration’s desire to make New York the best biking city in the country.
Even apartment buildings and hotels are buying bikes to offer as amenities for guests and residents. But while the cycling community expects the bike-share program to be a boon for business by encouraging more people to ride, it is also girding for competition.
“There certainly is going to be some overlap between us and bike share,” said Chris Wogas, president of Bike and Roll New York, the largest rental outfit in the city, which derives most of its business from visitors. “We’ll get people to do the shorter rides, and they will get some tourists.”
Like Portland, Ore.-based Alta Bicycle Share, which won a city contract to operate the bike-share program, Bike and Roll has contracts to do business in city parks. It has nine locations, including Central Park, Riverside Park and Governors Island—but nowhere near the 600 docking stations that the bike-share program is installing throughout Brooklyn, Queens and Manhattan.
Though Mr. Wogas is looking forward to the city program’s start, calling it “the tide that lifts all boats,” 6-year-old Bike and Roll, which operates in four other U.S. cities, is taking steps to protect its market share. The company is developing new programs to expand its reach, including marketing to locals. Additionally, it will increase its fleet of 2,000 bikes by 25% next year.
Other bike businesses are preparing for a dip in rental revenues. Steve Kahn, co-owner of Danny’s Cycles, which opened two stores in Manhattan within the past 18 months, said he expects to see a small decline in rentals after the bike-share program starts, but he’s hoping the proliferation of cycling and the growing number of dedicated bike lanes—there are about 500 miles of them now, and the city is rapidly adding more—will inspire New Yorkers to purchase bikes and related gear, such as helmets. That has been the case in other cities with bike-share programs, according to Transportation Alternatives, a local advocacy group.
Quick trips for local riders
The bike-share program—funded with $41 million from Citigroup and $6.5 million from MasterCard International—will bring a total of 10,000 blue “Citi Bikes” to town over the next year. An annual membership, aimed at locals in need of quick transportation, costs $95 and offers unlimited trips of 45 minutes or less. For trips longer than 45 minutes, extra fees are assessed for every 30 minutes, while weekly and daily passes for $25 and $9.95, respectively, offer unlimited trips of 30 minutes or less before extra fees are added.
“Citi Bikes are intended for short, commute-style trips, while bike rentals are used for more leisurely and long-distance rides,” explained a spokesman for the city’s Department of Transportation, which is overseeing the program.
Still, tourists will no doubt be attracted to the blue bikes, particularly since there will be so many of them in convenient locations. In Washington, D.C., where Alta runs a similar bike-share program, about 10% of the riders purchase 24-hour or three-day memberships. It also has partnerships with hotels that purchase day passes for guests.
“We have been pleasantly surprised by how many tourists have used the bikes since the program began in 2010,” said Josh Moskowitz, project manager of the Capital Bikeshare program for the District Department of Transportation.
The program’s appeal to tourists has caused some consternation. Bike and Roll Washington, D.C., is focusing on educating the public about the differences between the programs—for example, it charges $34 for a full-day rental, compared with a whopping $94 daily rental for the Alta bike-share program.
“As you can imagine, a tourist may not know that we exist if there is a bike-share rental option in front of their hotel,” said Catharine Pear, marketing director for Bike and Roll Washington, D.C.
Covering all the bases
The New York City Department of Transportation said it has not yet announced its marketing plans for visitors, including whether it will have partnerships with hotels.
To cover all its bases, Bike and Roll New York is ramping up a new membership program aimed at city residents. For $10 a month and a $30 activation fee, members can take out a bike for a full day as frequently as they want.
“Our membership program could complement Citi Bikes,” said Mr. Wogas. “We might get the commuter who wants to use our bikes on the weekends, because we have kids’ bikes.”
Meanwhile, residential property owners are seizing on the pedal-pushing trend, as are hotels. Stonehenge Partners, which owns and manages 24 upscale rental buildings in Manhattan, is launching a bike-share effort of its own in July at 41 Park Ave.—eight complimentary bicycles for its residents—and plans to roll it out in most of its buildings. In late June, the Andaz Wall Street hotel added four bikes to its list of complimentary guest amenities.
“Cycling [in the city] used to be a fringe thing that the crazy guy you knew at work did,” said Mr. Kahn of Danny’s Cycles, “but it’s mainstream now.”