Over the objections of an absent Mayor Rob Ford, the Toronto city council voted earlier today to bail out the financially troubled Toronto Bike Share program operated by Bixi.
Bixi Toronto began in May 2011 with 1000 bikes at 80 stations using a $4.8 million loan backed by the city of Toronto. Bixi has been struggling to make its Toronto loan payments this year and was in danger of insolvency by the end of the 2013 calendar year.
Cycling advocates in Toronto asked the Toronto council to help the financially struggling operation. The council today voted to provide additional financial propping, using $5 million available from a settlement between an outdoor toilet provider and the Toronto Parking Authority in a “toilets-for-bikes” swap. The council also directed the city planning director to consider a provision of bike sharing stations and bikes as part of the planning approval process with the goal of complementing, strengthening and expanding Toronto’s bike share program.
Bixi Toronto is safe for now, but what about the rest of the world?
Bixi’s parent company, the Public Bike Share Company (PBSC) of Montreal, has apparently been bleeding money for years. Last year, Montreal loaned Bixi/PBSC $37 million to stay afloat. Compounding Bixi’s financial problems is a legal dispute with 8D Technologies, which developed much of the solar powered, wireless technology driving Bixi’s bike share solution. This dispute delayed implementation of the program in Chattanooga, New York City, and the San Francisco Bay Area.
Although Bixi directly operates only a handful of bike share programs, the company provides bikes and bike share stations to bike share programs across Canada, in the United States and around the world. In the United States, all bike share programs operated by Alta Bike Share use these bikes and stations and depend on Bixi for technical support. These include the familiar bike share operations in the San Francisco Bay Area, Boston, Chicago, and New York City. Bixi bikes are also used by Melbourne Bike Share and Barclays Cycle Hire in London.
Bixi’s financial and legal difficulties worried the operators of Nice Ride Minnesota enough to prompt them to file a notice of material breach of contract against Bixi/PBSC. This notice can precede a lawsuit or a contract termination, freeing the Minneapolis-St Paul bike share company to look elsewhere for support.
Bixi’s apparent financial instability now worries the city of Vancouver, BC, which is in talks with Alta Bike Share to run that city’s bike share program. Vancouver approved a bike share plan and anticipates an opening date in 2014, but city transportation manager Jerry Dobrovolny told reporters that he won’t write any checks to Alta until he’s convinced Bixi can provide the bikes and stations. Bixi says their “temporary liquidity problems” are the result of a worldwide rapid expansion of bike share programs, with Bixi delivering thousands of bikes and hundreds of stations in the span of six months in numerous major rollouts.