– Was the Decision for a Single Company to Control a Large Territory for Decades Made on the Merits?
– Is It Good for Consumers?
In September 2011, the New York Dept. of Transportation (DOT) chose Alta Bicycle Share, Inc. to operate what later became Citi Bike — a popular bicycle rental system that uses docking stations to store bikes between customer rides. Citi Bike was created as a public-private partnership between the City of New York and Alta Bicycle Share — later purchased by the Related Companies, Equinox Fitness executives and former Deputy Mayor Dan Doctoroff.
The contract was the result of a competitive RFP process that the DOT initiated in November 2010 and on which two different companies bid. The contract with the City was later renegotiated and Alta Bicycle Share was renamed Motivate.
Last month, the on-demand transportation giant Lyft purchased Motivate for an estimated $250 million.
Along with all bicycles and docking stations in Manhattan, northern Brooklyn, western Queens and Jersey City (plus networks in Chicago; Boston; Washington, DC; Portland, Oregon; Columbus; and Minneapolis), Lyft acquired a contract that gives them a monopoly in Motivate’s NYC territories until 2029, based on recent reporting.
A Monopoly Until 2029
The contract didn’t always extend to 2029. According to a reader tip and initial due diligence, one contract appears to have been amended and restated on Oct. 24, 2014. Then, there was an amendment incorporated on Jan. 1, 2016. In both cases, the agreement was between New York City Bike Share, LLC (whose software and hardware Lyft now owns) and the NYC Department of Transportation under the leadership of Commissioner Polly Trottenberg. The contract term runs until 2019 with the ability to be extended for two additional 5-year terms if certain bike installation criteria are met and at the discretion of the City.
Those requirements don’t seem to require Citi Bike to do anything more than they have already done. We have learned that Motivate lobbyists and private equity investors may have played a significant role in the negotiation that led to the 2014/2016 contract.
New Technology Versus Old
Since the original contract was executed in 2011 and then extended several times per the terms of the contract, the circumstances have changed. New technologies are providing more mobility options than ever for consumers in cities across the country. Why did New York City officials agree as recently as December 2017 to renew a monopoly contract and stick with an older transportation technology in a large portion of Manhattan plus parts of Brooklyn and Queens?
To understand more, we’ve submitted New York City Freedom of Information Law (FOIL) records requests for these contracts, as well as emails, calendar entries, text messages and other communications records, from the Bloomberg and de Blasio administrations.
We’ll report back on what we learn from the records requests.
Scott Peterson is executive director of Checks and Balances Project, an investigative blog that seeks to hold government officials, lobbyists and corporate management accountable to the public. Funding for C&BP comes from sustainable economy philanthropies and other donors.