The end of the road for Bixi, Montreal’s bike-sharing system, is suddenly in sight: The company, drowning in debt, has been forced into bankruptcy protection by the city that spawned it. And here’s the rub: If Bixi eventually dissolves, Montreal taxpayers will ultimately pay for it, even though they were initially promised the program wouldn’t cost them a cent. So how did things come to this?
Bixi’s curious journey is a cautionary tale about what happens when trendiness is mistaken for soundness. When Bixi launched in Montreal in 2009, it was an instant sensation. It received awards for “eco-design.” Everybody talked it. A rap group rapped about it; “The Bixi Anthem” went viral. But buzz isn’t a bottom line. Bixi was never built on a sound business plan. Rather, it sprang from the glossy pages of a 2008 plan that promised to create a “green and modern” Montreal. A fleet of bicycles stationed throughout the downtown would be a “real boon to bicycle use.”
The city of Montreal gave birth to Bixi. The city parking authority raised it. International sales were supposed to finance it. Fifteen cities including New York and London bought Bixi technology but, displeased with software glitches, they withheld millions of dollars in payments. Bixi cured its cash flow problems by borrowing, with many loans guaranteed by Montreal. If Bixi declares bankruptcy, it’s unclear how much taxpayers will lose.
Bixi’s failings were hard to miss. In 2011, Montreal’s auditor-general detailed bad management and a lack of accountability. Bixi’s books were never been fully transparent – a curious thing for a publicly backed company. Perhaps if Bixi had been run with more professionalism, it could have been saved from the mess it finds itself in. But it’s worth questioning the underlying wisdom of a taxpayer-subsidized bike-sharing program.
Do we really need to share bikes, which are relatively cheap to purchase? Shouldn’t this be a fully private business, just like car sharing? And if we want to make urban bike use easier, would public money be better spent on public bike lanes, rather than public bikes?
Even if Bixi manages to survive, somebody needs to apply the brakes on the wishful thinking that created it.
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