Objectives

To determine whether the New York City Department of Transportation (DOT) collects selected revenues from the New York City Bike Share program as required by the terms of the agreement. We also determined whether DOT monitors the vendor for compliance with the contract provisions. The audit covered the period from July 2019 to October 2024.

About the Program

In 2013, DOT launched the New York City Bike Share program, which is part of a public-private partnership between the City of New York and a vendor. For the purposes of this report, this program is referred to as Citi Bike. The program is operated by the vendor, and DOT is responsible for planning, outreach, and oversight. It is a station-based program, where bikes are unlocked from one Citi Bike station and may be returned to the same or another station. To unlock and access the bikes, riders may use a key fob or a QR code and have use of the bike for 30 minutes (single ride and day passes) to 45 minutes (annual, monthly, and discount passes). At the end of their trip, riders dock, or lock, the bike at the bike dock at the station, signifying the end of their trip. Users who keep the bike for longer than the allocated time are charged a small convenience fee.

Since its inception, the program has grown significantly, expanding into all boroughs except Staten Island. The program generates revenues from rides, multiple “other sources” that include sponsorship and advertising, liquidated damages assessed for non-compliance with the terms of the Agreement, and lost parking meter revenue (revenue lost due to replacing parking meters with bike stations), which is fixed at $1 million per year.

DOT has a service contract with the vendor—the Amended and Restated Agreement for the Bike Share Program (Agreement)—which has been amended eight times and includes 12 Service Level Agreements (SLAs). According to Chapter 13 of the New York City Charter, agencies are required to monitor the performance of contractors they procure services from and enforce contract terms and conditions.

Key Findings

There are deficiencies in DOT’s monitoring and oversight of the program. DOT is not enforcing all the terms of the Agreement and is not ensuring that the City and its residents get the maximum benefit from the program. Our audit found that:

• DOT takes a passive approach to monitoring the Citi Bike program.
• DOT does not perform scheduled and systematic monitoring activities of its own or conduct any program reviews or audits to evaluate the success or shortcomings of the program or to make necessary adjustments to the terms of the Agreement.
• DOT officials do not perform calculations of their own to validate the accuracy of the information they receive from the vendor. 

DOT officials involved in monitoring the program are not familiar with the reports generated by the vendor and used to monitor the program. Despite having real-time access to program information, DOT officials were not able to explain key elements of the reports. We also found multiple instances of inaccuracies and errors in the information that went unnoticed until our review. For example:

• Errors in the queries (questions used to retrieve and analyze data from databases or information systems) resulted in the erroneous exclusion of 900,829 trips from the ridership count, which is needed to determine DOT’s share of ridership revenue.
• For all 203 days of data reviewed, the daily feed did not agree with the amounts reported by the vendor as follows:
  • 152 instances where the ridership reported in the daily feed was higher than the amounts reported by the vendor.
  • 51 instances where the daily feed was lower than the amounts reported by the vendor.

DOT could also not demonstrate that all revenue sources were received and included in the calculation of DOT’s share of the revenues, the vendor complied with all terms of the SLAs, or the liquidated damages assessed were accurate.

The program also allows for revenues from multiple sources, and in some cases, requires the funds to be handled in a specific manner. However, we found that:

• According to the contract, the main sponsor should have paid $54.9 million in sponsorship revenue. However, we only found evidence that $33.6 million in sponsorship revenue was received—a difference of $21.3 million.
• DOT did not provide evidence, such as supporting revenue calculations, to show that it included the $26.7 million in accelerated fees from the vendor for the option to extend the contract for a second term from May 2019 to May 2024.
• DOT did not provide evidence that the annual deposit of $1 million in lost parking meter revenue was deposited into the City’s bank account for 2019, 2020, 2021, and 2024—totaling $4 million.

Additionally, with regards to the lost parking meter revenue for the year where records were provided, DOT treated the $1 million payment from the vendor as a credit and believes that creating a liability in its general ledger satisfies the requirement for the annual deposit, because the Agreement allows it to approve expenditures from the account by the vendor to make improvements to the Citi Bike program. By not ensuring the lost parking meter revenue is deposited into the account, funds may not be available for necessary improvements and operating costs, potentially negatively impacting the revenues generated by the program and hence the City’s share of the revenue.

Key Recommendations

• Verify Citi Bike data by conducting inspections of stations and bicycles and reviewing the data received for accuracy and completeness.
• Ensure payments are received in accordance with the terms of the Agreement.
• Implement a process to track revenues from each source and ensure that all revenues due to the City are deposited into the appropriate accounts and transferred to the City’s general fund for use as required by the Agreement.