Less than six months into New York City’s Citi Bike program and it is already being declared a success. Early adopters might have encountered some technical kinks and there are still some issues surrounding accessibility and kiosk placement. But the numbers so far tell a home-run story for Citi Bike.
Since the May 27th launch, NYC bikers have collectively pedaled 9.4M miles and taken over 4.7M trips on the bright blue two-wheelers. With annual memberships just $95 (a monthly subway pass is $112), New Yorkers now have the convenience and affordability of a bike-share program, at no taxpayer startup cost. User revenues keep the program running and the city has even suggested they might eventually turn a profit.
But the real winner in all this might be Citigroup, the international financial services behemoth and Citi Bike’s namesake corporate sponsor.
A recent article by Nick Summers in Bloomberg BusinessWeek ran with the subtitle “How Citibank bought a city (cheap)” and asks if the Citi Bike campaign is “the greatest marketing ploy of all time?” Summers points out that not too long ago Citigroup took $476B in public bailout funds and guarantees — more than any other bank during the financial crisis. The corporation paid $41M — a mere 0.008% of its rescue tab — for naming rights on the bike-share program. Citigroup reported a net income of $7.5B in 2012, and turned a profit of $3.2B in the third quarter of this year.
Citi Bike is an investment that appears to have paid off for the global bank, according to recent polls. Summers reports that from May to July 2013 Citigroup’s own brand tracking poll saw a 17 point increase for respondents that had a “favorable impression of Citi.” Agreement that “Citi is for people like me” jumped 14 points over the same period. But the most interesting poll move was perhaps the 12-point increase for those in agreement with this statement: “Citi is a socially responsible company.” That’s a big jump in the age of “too big to fail” backlash and especially considering the periodic probes into possible Citigroup misconduct over the past few years.
So who is playing who in this story? Did a giant bank (of the same ilk as those once called “a great vampire squid wrapped around the face of humanity”) buy public goodwill at foreclosure prices in the same city where it helped contribute to a global financial meltdown? Or did New Yorkers just get a new form of public/private transport infrastructure without dipping into tax revenues?
It might be a little bit of both. Some call it “experiential branding.” Others might call it a new form of “social impact marketing,” as Professor Angela Y. Lee of the Kellogg School of Management describes for-profit or non-profit campaigns that use “marketing frameworks and techniques to promote individual and collective well-being.”
Judging by the sheer amount of buzz around the Citi Bike campaign, corporate sponsors are likely taking careful notes on this model. Corporate branding is nothing new (think sports stadiums), and some cash-strapped cities have even gone so far as to offer naming and advertising rights for public school buses. Corporate sponsorship may not be an ideal solution to improving city infrastructure without breaking the bank, but if it gets the job done, should it matter where the money comes from?
Share your thoughts. Are public-private partnerships like Citi Bike a mutually-beneficial way to fix improve quality of life for urban dwellers? Or are we too willing to hand over public space and assets to corporations that ultimately answer to stockholders instead of citizens?
[Image credit: NYCDOT, Flickr]
Lauren is a freelance writer based in New Orleans. She has covered a wide array of geographies and topics, from economic and business developments in the Arabian Gulf, to arts and culture in Turkey, to social enterprise and the microfinance sector in Southeast Asia. She's also worked on the business side of things, with two years experience in strategy and marketing at a large renewable energy firm. Keep in touch: @laurenzanolli and email@example.com.