NEW YORK—Citi Bike will install new stations in the outer boroughs and double the number of bikes by 2017.
Annual fees will be hiked to $149 as part of a deal involving the takeover of the service’s parent company, Alta Bike Share, by private investors.
Jay Walder, who was installed as Alta’s CEO on Tuesday, said that the injection of new funds will allow Citi Bike to tackle a host of problems that have plagued the service since its launch in May of last year—a shortage of bikes, software glitches, and a deficit in capital worsened by falling sales of the more lucrative daily and weekly passes.
“We have a financial model and the commitment from the new owners to be able to invest in this system,” Walder said at a press conference in Queens. “Anyone who uses Citi Bike regularly knows that it should be more reliable, it should be easier to use.”
Walder previously headed the Metropolitan Transportation Authority before leaving in 2011.
He resigned as chief executive of MTR Corp, which operates Hong Kong’s rail system, after an internal investigation found that he was partially responsible for the 2-year delay in the construction of a high-speed rail from Hong Kong to Guangzhou, China.
Alta is being sold to BikeShare Holdings LLC, a newly formed venture helmed by the CEOs of Equinox and Related Companies, a real estate company, and Jonathan Schulhof, who had previously lost a bid to purchase a large supplier of bikes and docking stations for programs like Citi Bike.
Talks began early this year, and the majority of the terms had already been set by the past summer.
“We have worked hard these last 10 months to get Citi Bike on track for the long term,” said Polly Trottenberg, commissioner of the city’s Department of Transportation. As part of the deal, Alta’s headquarters will move from Portland, Ore., to New York City.
BikeShare Holdings will inject $30 million in funding for Citi Bike, which is also set to receive $15 million in loans from Goldman Sachs and an additional $70.5 million sponsorship from Citi Bank going through 2024.
