BIXI, the bike-sharing service that started in Montreal (QC), is facing legal and financial issues that may threaten its survival. The National Post reports that the company is expected to show a $3.5 million loss for 2011 and, making matters worse, has been told to sell its profitable international programs.
Just five years ago, in 2007, the City of Montreal’s parking authority set up the nonprofit Public Bike System Company, which launched BIXI in 2009. The program started with 3,000 bicycles at 300 stations and received international interest and acclaim. BIXI began expanding throughout Canada and around the world, providing the bicycles for well-known programs in Washington (DC), London (UK), and Boston (MA), among others. Still, by 2011, the company was on the brink of collapse and the City of Montreal provided a $37 million loan and guaranteed $71 million in credit. At the same time, the city auditor told BIXI to sell off its international programs since a Quebec municipality cannot participate in commercial activities. “Whatever the outcome, let’s hope it gets resolved quickly because the uncertainty makes everybody uncomfortable,” says PBSC chairman Roger Plamondon in the National Post. “It really is a testament to the incredible reputation of the bike that cities would contemplate doing business with us while this is going on.”
In the meantime, software company 8D is suing PBSC for $26 million after the bikeshare company decided to drop 8D’s product from future installations. PBSC is counter-suing for $2.5 million, saying the company over-billed the nonprofit. According to the Montreal Gazette, 8D has offered to go to mediation and to help BIXI solve the technical problems that delayed deployment in Chattanooga (TN). BIXI’s U.S. partner Alta Bicycle Share said it is working on the problem.
Photo credit: Susan Mara Bregman