Co-op is short for cooperative. Most cooperatives adhere to the Rochdale Principles of Cooperation, established long before communism. One example of a co-op you might be familiar with is a credit union. If you've ever heard of Oregon's Tillamook cheese, it is produced by a farmers' cooperative. I was very involved in student housing cooperatives in college and I currently am a member of a food cooperative.

As for Citybikes, as M_S and Blue Order said - they're totally legit. Factoid: They are the only physical store west of the Rockies that sells Carradice bags and raingear. They may not win the superstar award for exemplary customer service, but they are very, very knowledgable and they're passionate about bikes and getting people on one no matter what their budget is.