Scott M. Stringer
Chair, City Council Transportation Committee
Commissioner, Department of Transportation
Dear City Officials:
We ask that you use your powers to stop Citi Bike from unilaterally assessing penalty fees on first-time pass users who clearly misunderstand how the bike-share system works.
There is an ever-growing number of complaints from visitors that all boil down to this:
I bought the 24-hour pass. I took the bike over the bridge to Brooklyn and had a great seven-hour ride. Great until I got my credit card statement and found the $100-plus overcharge. Citi Bike is a big ripoff!
Citi Bike is marketed as a purchase of a 24-hour or 7-day pass. But what you’re really buying are 30-minute chunks of time.
Screenshots from citibikenyc.com
The money generated by penalty fees is not insignificant. The New York Post reported last month that those fees, from pass purchasers and annual members, have amounted to more than $4 million since Citi Bike opened in May 2013.
We calculate that this year penalty fees to people who purchased passses amount to13% percent of New York City Bike Share’s gross revenue. Mistakes of that magnitude have to indicate the customer doesn’t understand what he is buying.
Citi Bike should be working hard to get that number down. Instead, penalties have been a consistent source of revenue, ranging from 60% of total pass revenue in May to 44% in January.
This year though August NYCBS collected $1.4 million in penalty fees to what it calls “casual users” in its monthly reports. We hope you agree that is a stunning number.
But there’s another number that’s even more of a stunner. In August, NYCBS refunded just 2.11% of these the casual users’ penalty fees, a number that suggests a system that is operating to near perfection. The most NYCBS has refunded since it started reporting that number was 12% in May.
This is a bike-sharing system that suffers from:
- a high number of docks that malfunction and stations that lose power
- well documented reports of stations that stay empty or full for hours
- an app that accurately reports station conditions only half of the time
- self-acknowledged software issues.
Given these ongoing conditions, we fail to understand how a company can claim that 98 percent of overtime charges are valid.
We have some suggestions for reform
- First-time pass users get an automatic refund and a communication from Citi Bike with a clear explanation of the 30-minute limit. If they break the rules a second time, it’s their tough luck
- NYCBS no longer gets to play judge, jury and executioner. An independent third-party should be deciding when refunds are made, not a company that is struggling to make a profit.
What’s happening to out-of-towners who don’t read the fine print before renting a bike is a serious setback to the efforts of every New Yorker who works hard to make sure our visitors’ experience is a pleasant one.
We cannot tolerate visitors carrying home a sour experience when they could and should be talking about an exhilarating time in the most special city in world.