Montreal operations will continue for 2014…
by John Symon
The Montreal operations of the Bixi public bike share program will continue in 2014 promises Mayor Denis Coderre after the parent company filed for bankruptcy protection. The Société de vélo en libre-service (also called the Public Bike System Company or PBSC) made the move on January 20, five days after Montreal asked PBSC to repay a loan.
The company is currently facing a liquidity problem because Chicago and New York City are not making payments on $5.6 million owed to PBSC; this is related to delays with the software used to operate Bixi in those U.S. cities. On January 15, Montreal asked for repayment of $31 million from PBSC, but the company filed instead for bankruptcy protection. PBSC owes about $50 million to various creditors, including the $31 million to Montreal.
“This decision has been carefully considered. We represent the taxpayers, and injecting additional funds to maintain the Société de vélo en libre-service was out of the question. If Bixi can be saved, it is through the Bankruptcy and Insolvency Act. Waiting any longer would only increase the financial risk for the city, which would be unacceptable,” declared Coderre.
“The main problem is that Bixi was conceived as a commercial enterprise by the former mayor Tremblay,” added opposition leader Richard Bergeron. “But it is really a public service. We need to bring back transparency into the management of Bixi!”
The very popular Bixi program was launched under former mayor Gerard Tremblay in 2009, winning praise and awards. But there was strong criticism about the nebulous business plan and murky financing behind Bixi. In 2011, opposition parties in Montreal unsuccessfully tried to block a $37 million loan to PBSC. In September 2013, Montreal’s auditor general Jacques Bergeron expressed “serious doubts about Bixi’s ability to continue operations.”
No job losses are foreseen at Bixi’s Montreal operations in the immediate future states a press release on the Bixi site. The Times believes about 50 people work directly for PBSC in Montreal and another 400 jobs in Quebec are generated by Bixi operations. The Bixi season here normally runs from May through November and annual passes are still available for $82.50. Montreal’s 5120 Bixi bicycles are stored in a warehouse in Lachine during the winter months.
In Toronto, the city took over Bixi operations from PBSC in December, fearing that the company was near financial collapse. The Toronto system has 1000 rental Bixi bikes operating out of 80 docking stations in the downtown area. “We don’t mention Bixi anymore,” said Toronto councillor Denzil Minnan-Wong, indicating that a name change is in the works, but the service is likely to continue for 2014. There is speculation that Oregon-based Alta Bicycle Share will assume management of the Toronto Bixi program.
PBSC has also sold Bixi systems to such cities as Boston (MA), Chattanooga (TN), London (UK), Melbourne (Aus), and Minneapolis (MN). It is unclear if the program will continue in all of these cities, but Alta is already managing some of them. PBSC had an estimated net income of $1.5 million on revenues of $51 million in 2011 according to Wikipedia.
