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City urged to buy out BIXI Toronto cycling company

A cyclits rides past BIXI bikes in Toronto on Wednesday. BIXI Toronto Inc. borrowed $4.5-million from the city, and has a loan balance of $3.9-million as of Dec. 31, 2012, according to a city report going before the mayor’s executive committee next week.

Kevin Van Paassen/The Globe and Mail

Toronto cycling advocates are calling for the city to buy out the cycling company BIXI Toronto and expand the bike-sharing program.

In the wake of news Tuesday that the city is reviewing its deal with BIXI after revelations of some financial problems in a city report, Cycle Toronto says that the bike-sharing program should be viewed as an important part of the city's transit system.

Executive director Jared Kolb said the private sector alone doesn't do a good job at providing transit.

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"No city in the world has shown for transit to pay for itself," Mr. Kolb said. "I think the city's in a great position to be able to make an investment like that."

Mr. Kolb said bike-sharing programs are ultimately successful when they are owned by the city.

"Whether it's in New York, in Paris, or in Britain, in London, cities are partnering with the private sector, but they're buying the systems, they own the systems," he said. "That's not what we have here in Toronto."

"It's working well in other cities with respects to the city owning and contracting it out to a private operator, for instance."

In the Ottawa-Gatineau region, the bike-sharing system is owned by the National Capital Commission (NCC), a Crown corporation responsible for development and improvement in Ottawa. The program was launched in 2011, and cost the city $3,050,000, according to NCC spokesperson Jean Wolffe.

Mr. Wolffe said one-third of the up-front cost went toward purchasing the equipment, and two-thirds went toward a five-year deal with BIXI, wherein the company would be responsible for running the system in Ottawa. NCC purchased 250 bicycles and 25 stations from BIXI, and has 305 regular subscribers and 8,692 casual users, according to 2012 statistics.

BIXI Toronto Inc. borrowed $4.5-million from the city, and has a loan balance of $3.9-million as of Dec. 31, 2012, according to a city report going before the mayor's executive committee next week. The company, which has been operating in the city for two years, also faces difficulties making money during the winter months. BIXI has similar programs in London, Montreal, and the Ottawa-Gatineau area.

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Mayor Rob Ford called BIXI's financial troubles "unfortunate."

"That's why I am always careful when people come and ask us for money," he said Wednesday.

"I've always been a little reluctant," he said later when asked if the city should be involved in such ventures. "Sometimes you have to, but there has to be guarantees in place if they can't pay. I want to find out what guarantees were in place when we got into this agreement."

Mr. Kolb said that it's important to note that BIXI has paid back $600,000 of their loan over the past two years. He added that BIXI had hoped that the system would have been expanded to 3,000 bikes by now.

"But that isn't the case, that isn't where we're sitting today," he said.

"The original proposal had called for 3,000 bikes, as far west as High Park, as far east as Broadview over the DVP, over to Dupont. So to be able to do that, you've got to make an investment in stations and in bicycles."

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With files from Elizabeth Church

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