New York City–October 25, 2011—Last week we sat down with Alison Cohen, President of the company that won the bid for the city’s bicycle share program, called NYC BikeShare to be unveiled next spring 2012. NYC BikeShare will be operated by Alta Bike Share, a subsidiary of Alta Planning and Design. Below is our interview with her.
You were among six companies that submitted RFP’s to the City of New York’s Department of Transportation to do bike share in New York. Why do you think you won the bid?
I think it was a combination of three items. We partnered with Public Bike System that makes in our opinion the best [bike share] system in the world, robust, well designed, with a design team that continues to innovate. A big selling point was the new solar technology that they came out with for this project, solar that doesn’t require direct light, so in the shade it will help –in the urban canyons of New York that is really crucial. So, technology was a huge piece of it. As operators we are the only company that is focused on bike share operations, sort of like a public transit operating system. I don’t know the exact details of the other teams. Most of the other teams have just the system. We have a very experienced operations company, whether it is rebalancing maintenance, station maintenance, or IT back-end systems that we have developed to make this as efficient as possible. We are the only bike share operating company.
What about JC DeCaux who operates the bike share in Paris? Aren’t they also a bike share operating company?
DeCaux is an advertising company that does bike operations. [And they did not participate in the RFP process.] And there is the company that does the operating system that did not bid. Of the competition we were the only team that had an experienced operating company. And in the US we are the only company operating multiple systems in major cities in the US and they have both been very successful and launched with positive press and few problems.
What do you include in your definition of operations?
[In addition to the operations of the bicycle systems,] operations include multimedia and public relations. All of the systems that we operate and plus the other systems that Public Bike Systems operate are successful and expanding and that is a pretty powerful message. That is the second criteria, that we are already successful and expanding.
One of the interesting aspects of your company and B-Cycle [the other company that submitted an RFP and made it to the second round,] was that you came in as a not for profit.
Well, first of all we did not come in as a not-for-profit…..
Sorry I thought I saw that widely reported in the press. [Actually the confusion stemmed from the fact that Bixi, the operating company in Canada that is run by the Public Bike Share System, Alta’s bike share partner, IS a non profit operating in Canada, and the Washington DC bike share operated by Alta is heavily subsidized by the Federal government, with future profits expected, but currently not realized. See discussion on Velotraffic for more info. ]
We did an estimate of revenues and operating costs and we wouldn’t be here if we didn’t think it would be a profitable operating system.
Well isn’t the D.C. operation federally subsidized?
Yes it is. Certainly when that system is run by a government entity that is publicly funded, there are many other priorities hat can be funded. Boston is publicly funded as well. There was a preexisting system in DC called Smart bike and that helped in the education and helping people know what bike share was.
What is the pricing structure you think you will come up with? You have an $85 membership in Boston, with rides over 45 minutes costing a fee. What kinds of inputs do you expect to help you make this decision in New York?
Annual membership will be less than $100 a year, the daily rate will be less than $10. We still haven’t decided on the number of minutes they will be allowed for free use, that will be from 30 to 45 minutes [as a base].
Can you talk about how many New Yorkers you expect will use the system versus tourists and visitors?
[Using our experience with the Washington, DC system,] member rides are a huge percent, and about 89 percent are under the free ride period. The visitors are not as time sensitive, going over 45 minutes. New York is a much bigger city, so we will have to see what happens.
Clearly it will be very expensive to run the New York system and make it profitable. Who are some of the sponsors you are trying to work with?
We are actively outreaching to find major systems sponsors, and we are talking to many companies. Ideally we would want one major sponsor. If we get a major sponsor that would be great if that does not come in, the max we would use is four. Our model is that the sponsor will help fund the capital and the launch costs and the [ongoing operations of the] system will be funded through ongoing fees from the users. We are not putting a price on it.
A lot of attention has been paid to the idea especially in the RFP that you aren’t to make the bicycles big billboards: First of all, is naming the system with a bike sponsor and painting your bikes a certain way out of the question, like “Bank of America” Bike system?
The RFP specifically leaves out exactly what is for sale. Currently for advertising space the city specifies certain spaces on the bicycle and on each docking point. With sponsor names, I think that depends on the valuation. The challenge of doing a named system is doing expansion, but we are not closing that door.
Where else in the system can you support advertising and sponsors?
There are many items related to the system. There is the website, the mobile application, the trucks, and shirts and operating team all offer all sorts of cross promotional opportunities. There is also event sponsorship. We will hopefully have over 6 figure [number of] members to provide capital to fund the operations as well. If there is a technology company, we can also incorporate technology in the bike share, and that is another advertising opportunity. And then there is the credit card company that offers the credit card technology. [There is no real limit to how we can obtain sponsorships if we think creatively;] If it were a coffee company it could be a cup holder on the bicycle.
That’s a great idea. Starbucks?
There are all kinds of interesting and fun ideas that we are working on. We already have a marketing staff [at Alta in Portland] and some are focused on NYC bike share. [New York City staff has not been hired yet.]
Do you already have a company structure in place in New York?
We have already created a company, but the rubber is not going to hit the road [in terms of hiring people to staff it] until we get our sponsors.
I am sure you have had lots of people knocking at the door eager to work for you.
We have gotten many, many inquiries already.
What kinds of jobs will you be looking to fill?
Advertising, maintenance, [and other positions]. This is major transit operation and no one else does this.
What about sub contractors for some of the services, will you be looking for those kind of service providers?
When the opportunities present themselves, but the main core of the operations we will do ourselves. [We take the contract with the city very seriously,] and when we sign this contract with defined service provisions, it is not something we take lightly. [So service providers are contracted, there will be a high bar for performance.] This is why the city hired us, because we will be bringing our best practices to the operation. For example, we will have a huge warehouse in one of the five boroughs, one or more. And we will be using parking spots across the city We are going to have dozens of rebalancing operations of vehicles on the road. You can imagine at Penn Station, 200 docks will empty out in the morning, and we will need to continually balance out the system. We will have many employees on bicycles every day going around and checking bikes for cleanliness and safety as well. Then there will be bike maintenance on all of the bicycles, and station cleaning as well as cleaning off graffiti. When parts break, like pedals, we have to warranty all the parts and replace them. We will have a huge internal processing of spare parts and warranty returns with the supplier. We’ll also have to staff a call center.
Will you have a way to track if a bicycle is out of service or perhaps even stolen?
We have a technological way of tracking it. We will know when any bike in the system is in the station or not in the station and we know who the last person who took it out. Right now there is no tracking of the bikes. There is a question with the city why that would be deployed. The police department would like to know that these assets are tracked somehow. It is not a simple or cheap undertaking, however. Nothing on the bike is vandalism resistant. But it is really, really hard to take apart, and all the tools are proprietary. There is no reason to take any parts because they don’t fit on other bikes.
Where are the bikes and parts made?
The bikes are made in Quebec, the stations are manufactured in upstate Plattsburgh, under Public Bike Systems management.
Some people in the city have suggested that the advertising rights on the bicycles is a franchise issue that has to be approved by the city council and also administered by them, just like the contracts for the bus shelters advertising space. Is that true and is it becoming an issue?
I would like to defer to the city to comment on that. It has been determined that there will be public hearings related to bike share. We don’t expect it to be an issue. The NY Times reported on this issue early in the process. [ See article.]
I saw that you have a number of open houses scheduled with community boards. I know the bike share does not have to go through the ULURP process or get their approval, but certainly having them on board would help given a lot of the bicycle related resistance from select boards around the city. Is that your purpose, to ease the way?
There has been a large number of open houses and community outreach [we have scheduled and gone through already.] [There has also been a lot of opportunities for public input,] and we already had a hearing with the transportation committee at the city council and the overall response was positive.
One of the things that you must be dealing with now is where to put the bicycle systems locations: I saw that DOT had posted something on their site asking for the public’s input. What will you do with the information and what other things will you be looking for in choosing locations?
Basically we are going to the Community Boards with many options for siting, 25 to 30 percent of the proposed sites that they ask for, will become sites. For every final site there are three or four options. It is never going to be unanimous. But the process of getting their input is critical. We are committed to having positive acceptance in the neighborhoods where it is presented. There are going to be objectors, it will not be 100 percent, but we expect that the majority of people in the communities [will want the bike share.] The fact is that there is a general density grid, from a business perspective we need to follow. Alta and DOT will have the final say, and the system at the end of the day has to be profitable.
Can you talk a little more about the types of users you expect in New York?
We have already seen two different user patterns in Washington, D.C. and Boston. In D.C., over 80 percent are residents. In Boston over 50 percent are visitors, and 45 percent are residents. I think [the user distribution in those cities] has to do with the design of the system and how and when they were launched. The Boston system is most dense in the tourist area, [whereas in DC there is more density in the residential areas.] In New York we are blanketing areas most frequented by tourists, [but also providing locations for residents, so] I do expect maybe we will see a fifty-fifty split. That being said, the core users of the system will be regular users [subscribers].
Is New York City safe enough for bicycle share?
Obviously the DOT has done a huge amount of work to improve the conditions for cycling. I can’t believe the difference since they began working on it several years ago. [Note: Alison used to live in New York City, then left for a number of years and since her return has noted the tremendous difference in bicycle conditions that have been improved by the Department of Transportation under Commissioner Janette Sadik-Khan and Mayor Bloomberg.] As a cyclist it is different from other cities in the world, and the DOT is going to continue doing its [good] work. Certainly bike share in itself will help make cycling safer, more bikes, equals more awareness. To augment that, we intend to roll out a whole education system to help with the conflicts between bikes, pedestrians and automobiles. [We will do that with] Bike share bikers, emails, and twitter and the stations and the bikes themselves will have safety messaging on them. The bikes and the rider population are not risk-taking, the bikes themselves are upright, they have lights and bells and the rider who might not be every day riders, tend not to weave in and out of traffic. So overall it is a safer riding situation than the norm. The crash records in our system tend to be very positive.
We didn’t have time to talk about you and everyone wants to know who you are and your background. I know you have to go, but can you tell us briefly about your previous experience?
I think I can be found on Google/ Linked in as Alison Cohen. [Reporter’s note, yes, we found her. Here is the link. To summarize Ms. Cohen was founder of Bloo Bike LLC, which she started to provide bike share in Boston. That later became a joint venture with BIXI, and is now the full fledged bike share system of Boston. Ms. Cohen received her SM in atmospheric sciences from M.I.T., was a professional tennis player, and once worked as an investment banking analyst for Goldman Sachs. ]