Citigroup Pays $41 Million to Sponsor NYC Bike-Share Program
Citigroup Inc. (C) agreed to pay $41 million to sponsor New York City’s bicycle-rental program, which Mayor Michael Bloomberg said will be the largest such system in the U.S. when it begins in July.
The Citi Bike program, presented by the mayor and Citigroup Chief Executive Officer Vikram Pandit at City Hall today, will offer 10,000 bikes branded with the New York-based bank’s logo at 600 docking stations in Manhattan, Brooklyn and Long Island City, Queens.
The bike-share program, first advocated by the city Transportation Department in 2009, would provide a low-cost transit alternative in a city where almost half the workforce lives within 5 miles (8 kilometers) of its place of work, the department said in a planning document.
MasterCard Inc. (MA) CEO Ajay Banga, also at City Hall, said his company would pay $6.5 million to provide bike-share stations with “PayPass Tap & Go” payment points and traditional magnetic-stripe terminals as part of its Priceless New York promotion of events and attractions for residents and tourists.
“We recognized an opportunity to play a meaningful role in an initiative that will enhance the lives of New Yorkers,” Pandit said. The program “will add a new, sustainable option to help people navigate the city” and mean “fewer cars on the road, less-crowded buses and subways,” and reduced air pollution, he said.
Similar systems exist in Paris, with 20,600 bicycles; Barcelona, which has 6,000; and Hangzhou, China, which offers as many as 60,600, according to Paul DeMaio, a manager of MetroBike LLC, operator of the Arlington, Virginia, portion of Washington’s 1,500-bike system.
Other U.S. cities with installed or intended systems include Boston, Philadelphia, San Francisco, Phoenix, Denver and Chicago, the department said.
New York will share any profits from the rentals with Portland, Oregon-based Alta Bicycle Share, chosen as its operator in September. The company works with governments, colleges and private companies in North America, Australia, Europe and the Middle East, according to its websites.
The system will operate with no cost to the taxpayers, Bloomberg said. Citigroup money will be used to buy the heavy- duty two-wheelers, equipped with bells and rear and front lights, and the installation of the docking stations, he said.
If a rider reports a missing bike, the operator will impose a $1,000 fee on the renter’s credit card, refundable upon the bike’s return or upon a police determination that the bike has been stolen, said Seth Solomonow, a Transportation Department spokesman. Bike-attached GPS navigation systems will signal its location to minimize loss and theft, Solomonow said. Proprietary hardware would be required to detach the bike’s wheels and handlebars, he added.
The system will have an annual membership cost of $95, with options for day and weekly use. Members must be at least 16 and may use the system for trips of as long as 45 minutes. Riders using Citi Bikes for longer periods will be charged extra fees, the mayor’s office said.
Installation of solar-powered, wireless docking stations that accommodate between 15 and 60 bikes will begin in late July, with completion of the 600 stations scheduled for 2013. Helmets will be encouraged, yet not required, consistent with state law, Bloomberg said.
The Transportation Department has distributed more than 50,000 free helmets since 2006 and installed more than 390 lane- miles of bicycle routes since 2002, for a total of more than 700 miles of bike lanes, including parks and greenways, according to the department’s website.
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.
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