Bixi bike will cost another $16 million for Montrealers
Bixi bike – The City of Montreal has been ordered to pay an additional $15.9 million for the Bixi bike share program following a Superior Court ruling on April 18. The city must pay $15.9 million plus interest to the bankruptcy trustee firm, Litwin Boyadjian, handling the affairs of the Public Bike System Co (PBSC).
Times readers will recall that PBSC, the former owner of Bixi bike, went bankrupt in early 2014 after which Montreal took over local operations of the firm. Montreal was the only secured creditor in that bankruptcy and other creditors were left with nothing.
The complicated history of Bixi bike in Montreal saw it being launched in 2009 by Stationnement Montreal, the municipal agency responsible for parking meters. Initially there were promises that the program would generate money for Montreal, especially through sales of the program to other cities. While cities from London (England) to New York to Melbourne (Australia) bought into the program, cash flow problems forced Montreal to transfer Bixi to PBSC.
Montreal was very involved in the operations of Bixi, lending PBSC $37 million in 2011 as well as offering loan guarantees worth another $71 million. Because helping private businesses is outside of Montreal’s mandate, this financial support was declared illegal. That technicality cleared the way for the lawsuit by Litwin Boyadjian on behalf of the unsecured creditors.
Mayor Denis Coderre reacted to the news, reminding the media that Bixi was established under a previous administration; he did not indicate if Montreal would appeal the ruling.. Since the 2014 bankruptcy, Montreal has conferred local operations to a non-profit society while overseas operations were sold for $4 million to Longueuil businessman Bruno Rodi.
This bad news comes on the heels of an April 12 report by the Montreal Economic Institute (MEI) claiming that, by 2019, the bike-sharing system will have cost Montrealers over $60 million. That report was published before the court ruling which presumably pushes the total to $76 million, not counting interest.
“The intentions behind this (Bixi) policy were surely good ones, but all indications are that what was presented as a service that would pay for itself, and even be profitable, has become in the end an additional and recurring burden on taxpayers,” concluded Bradley Doucet of the MEI. The report also suggests this money might have been better spent improving bicycle infrastructure around Montreal.
The Bixi bicycle won international awards when it was first launched and the bike share program remains very popular with Montrealers. Some 4.1 million rides were made on 5,200 Montreal Bixi bikes in 2016, a 16% increase from 2015. The 2017 Bixi season began on April 15 and a one-year membership is $89. https://montreal.bixi.com