The City of Montreal will acquire the local assets of Bixi for $11.9 million reports La Presse. This same move will assure that the popular Bixi bike share service is maintained in Montreal this summer. As reported previously, Bixi’s parent company, the Public Bike Share Company (PBSC) declared bankruptcy on January 20 after Montreal called a loan.
But this acquisition must still be approved by a court overseeing PBSC’s bankruptcy procedures. There have been many interesting revelations at the bankruptcy proceedings; some indicate that Bixi still has a lot going for it. PBSC owes about $50 million to 139 creditors, including some $31 million to Montreal. The $11.9 million purchase will be deducted from the amount that PBSC owes the City.
Montreal had been expected to put Bixi under the management of the City’s transit authority, the STM, but municipal authorities say that they instead intend to establish a non-profit organization to manage local Bixi operations. Suzanne Lareau of Vélo-Québec welcomed the news, but wants to see the mandate of this non-profit organization. She also hopes that it is striving to provide bike share services over the long term.
The public has also finally learned secret details of PBSC’s financial situation, including that the company lost almost $6.5 million in 2012 reports The Gazette, which describes Bixi as being, “bankrolled by city of Montreal taxpayers who had been left in the dark.” The Gazette further paints a picture of the bankruptcy proceedings as providing pretty good theatre.
Some of the good news is that the aluminum-framed Bixis (many of which were bought in 2009), are proving very robust and–with proper maintenance—are likely to keep rolling well beyond their 10-year expected lifespan. Only 35 of the 5,430 bikes are considered “un-repairable.” The purchase by Montreal puts their value today at $412 each versus the $910 that PBSC paid five years ago. The 403 docking stations are evaluated at another $8.7 million.
And very few Bixis have been stolen; only some 140 bikes have been lost over five years. This compares very favourably to a similar bike share program in Paris, France, that lost 9,000 bikes (one-third of its fleet) in 2012 alone. The distinctive-looking Bixis are difficult to hide, have few parts in common with most bikes, and are equipped with high-tech anti-theft features.
We also learn about potential buyers for PBSC, including an unidentified company that offered to pay more than $32 million for Bixi last summer according to testimony told to court-appointed trustee Raymond Massi told Quebec Superior Court Judge Denis Jacques.
In December, 2013, Oregon-based Alta Bicycle Share offered to buy PBSC in a deal to include all of Bixi’s debts—estimated at some $46 million–Massi said. That deal fell through, however.
Despite a net loss of $6.5 million in 2012, revenue that year surged 42 per cent, to reach $45.2 million. In 2013, PBSC’s revenues reached $63.1 million, with the net loss dropping to $757,000. In January 2014, PBSC declared bankruptcy.
Montreal’s Bixi season should start April 13 this year, with presumably the same dates in Longueuil and Westmount, which own 70 and 50 Bixis respectively.
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