REQX Ventures buys Alta Bicycle Share

[PotomacCyclist]

Alta is the company that manages many of the large bikeshare systems in the U.S. and abroad, including those in Boston, NYC, Chicago, Chattanooga, and Capital Bikeshare in the DC/Arlington area. According to reports, REQX Ventures will expand NYC’s Citi Bike system while increasing the annual membership fee (perhaps from $95 to $145).

http://www.capitalnewyork.com/article/city-hall/2014/10/8555342/sources-citibike-deal-closes?news-image

What does this mean for CaBi? I don’t know, but it might be useful to look at the background of one of the key players in the deal. Jonathan Schulhof is the managing partner of REQX Ventures. The company is funded by Related Cos. and Equinox, a high-end fitness chain owned by Related. (In this area, Equinox has locations in Bethesda and Tysons Corner. They have a much bigger presence in NYC and Southern California.)

REQX attempted to buy PBSC/Bixi but lost out to Bruno Rodi. At the time, Schulhof said he wanted to “proliferate bike-sharing around the world.”

He studied French literature and government at Dartmouth, and law at Stanford. He is married to the daughter of Wall Street financier Henry Kravis (of KKR). He sits on the board of an energy technology company. He is described as a passionate cyclist who rides on the weekends and bikes to work. He rode in the TD Five Boro Bike Tour on a Citi Bike this year.

Before the Alta sale, REQX had indicated that Alta bikeshare systems might be able to expand by obtaining stations, software and bikes from the new 8D Technologies partnership with Alta. (Pronto Cycle Share in Seattle just started up, using equipment from the 8D/Alta partnership.) As noted in other threads, 8D created the software for earlier Alta-managed Bixi systems, including Capital Bikeshare. That software is generally considered to be superior to the faulty software used in newer systems in Chicago and NYC. (After the 8D/Bixi split, problems with Bixi’s new bikeshare software led to disputes with Chicago and NYC, both of whom withheld payments, a major factor behind the Bixi bankruptcy.)

The new Bixi has also indicated that they will be ready to resume shipping bikeshare equipment in the coming months.

BikeArlington and DDOT have already issued statements about the new 8D/Alta equipment. They would need to test its compatibility with existing CaBi equipment. If the tests go well, then CaBi/Alta could have two options for future expansion, 8D/Alta (REQX) and the new Bixi. (Bixi would need to work on their software product, but they could still be an adequate supplier of stations and bikes in the future, alongside 8D/Alta.)

Schulhof and REQX aren’t going to give away the store in the quest to expand and stabilize bikeshare across the country and around the world, but it does appear that they are earnest about solidifying bikeshare, not just looking for a quick buck. If so, then this could be good news for fans of CaBi.

http://online.wsj.com/articles/citi-bikes-suitor-jonathan-schulhof-is-a-mystery-to-many-1407376796

http://gothamist.com/2014/10/25/citi_bike_saved_by_real_estate_comp.php

Topic

[mstone]

Is that pronounced wrecks?

[Dewey]

Ouch, a 60% increase in the cost of annual membership for NYC Citi Bike users.

[PotomacCyclist]

It’s still a good deal for those who use Citi Bike to replace some of their subway or bus trips. Even at $145 a year, a member would break even if they biked 29 days of the year (two ways). The base subway fare is $2.50, or $5 round-trip. Some might bike more than twice a day on certain days, which puts the break-even point that much earlier.

REQX is expected to expand the system, so those memberships become even more useful. Ideally, they will fix the flawed Citi Bike/Bixi software too.

I’m not sure why tourists haven’t used Citi Bike as much as expected. Maybe it’s the software issues? Is it a lack of infrastructure in tourist areas? Or are NYC drivers more intimidating to other road users? I don’t know. DC drivers can be reckless and aggressive too, but that hasn’t deterred visitors from making numerous CaBi trips over the past 4 years.

[cyclingfool]

Capital Bikeshare’s success with the tourist market is probably a combination of several factors:
*Most of DC’s tourist attractions are concentrated in a relatively small area, which coincidentally is largely parklike and with decent infrastructure totally separated from cars
*Relative lack of metro stations nearby, especially around the Tidal Basin and the west end of the Mall.

Downtown DC near and on the Mall is fit all intents and purposes a big free amusement park.

NYC tourist sites are not so clustered, and the cycling infra between sites, though improving, is not generally the parklike setting of the Mall.

People probably feel daunted by traffic, distance, and relatively more difficulty navigating in NYC.

[PotomacCyclist]

Alta Bicycle Share has a new CEO, Jay Walder (former head of the Metropolitan Transit Authority in NYC), and a new location, moving from Portland OR to NYC. A new entity, Bikeshare Holdings LLC, will take formal control of Alta.

Citibank is providing an additional $70.5 million to NYC’s Citi Bike system, on top of the $41 million it has already invested as the lead sponsor. The new deal extends Citibank’s licensing deal past 2019 to 2024. The new investments will boost the number of bikes in Citi Bike from 6,000 to about 7,000 next year and as many as 12,000 by 2017. Goldman Sachs is increasing Alta’s credit line by $15 million.

So clearly the new owners are focusing on expansion of bikeshare, not a retrenchment and cost-saving mode.

NYC Housing Authority residents and members of participating credit unions remain eligible for the current $60 discounted annual membership program.

***
Arlington, DC and Alexandria have already announced their plans to expand Capital Bikeshare in their jurisdictions. They have been delayed by the equipment supply problems created by the Bixi bankruptcy. If that gets sorted out (which seems to be the case), then Capital Bikeshare could see its own significant expansion next year. There have been a few new stations and bikes this year, but those were obtained from Ottawa (which is switching from a Bixi system to a different system). If the Alta/8D partnership and the new Bixi are able to start providing bikes and stations again, expansion will pick up in the CaBi system.

BikeArlington posted their expansion plans just recently. DC will move into new neighborhoods while also adding new docks at the busy downtown stations. Prince George’s has been planning to start up bikeshare in College Park, but those plans were put on hold because of the Bixi bankruptcy.

Quite a lot of news in the bikeshare world this week and it seems to be positive for now. Some were concerned that Alta, Bixi and other bikeshare-related companies would be bought by groups that would try to tear down bikeshare systems. That doesn’t appear to be the case.

http://www.nytimes.com/2014/10/29/nyregion/citi-bike-to-expand-as-new-york-city-reaches-deal-with-private-company.html

http://www.streetsblog.org/2014/10/28/citi-bike-2-0-new-owners-hire-jay-walder-promise-bike-share-expansion/

Alta Planning + Design remains independent and based in Portland OR. Alta Bicycle Share is a spinoff of the design outfit, which became much bigger than the original company.

http://bikeportland.org/2014/10/28/nyc-investment-company-buys-alta-bicycle-share-hires-former-transit-ceo-112810

[PotomacCyclist]

@PotomacCyclist 98161 wrote:

It’s still a good deal for those who use Citi Bike to replace some of their subway or bus trips. Even at $145 a year, a member would break even if they biked 29 days of the year (two ways). The base subway fare is $2.50, or $5 round-trip. Some might bike more than twice a day on certain days, which puts the break-even point that much earlier.

REQX is expected to expand the system, so those memberships become even more useful. Ideally, they will fix the flawed Citi Bike/Bixi software too.

I’m not sure why tourists haven’t used Citi Bike as much as expected. Maybe it’s the software issues? Is it a lack of infrastructure in tourist areas? Or are NYC drivers more intimidating to other road users? I don’t know. DC drivers can be reckless and aggressive too, but that hasn’t deterred visitors from making numerous CaBi trips over the past 4 years.

The Citi Bike annual membership fee is now officially $149 a year.

http://citibikeblog.tumblr.com/post/101182979267/expansion-woo-hoo

[Author]

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