MONTREAL (BRAIN) — The taxpayers of Montreal are expected to be the biggest losers following the bankruptcy of Bixi, the nonprofit spun off from the city's transportation department to supply international bike share systems.
The city announced earlier this week that it was calling in its loan to Bixi, which owes the city about $40 million in unpaid loans. However, Montreal's bike share programs — as well as those in other cities that rely on Bixi's systems, including New York; London; Washington; Boston; Chicago; Minneapolis; the San Francisco Bay Area; Aspen, Colo.; Chattanooga, Tenn.; and Columbus, Ohio — are expected to continue uninterupted, at least as soon as spring weather allows. There are an estimated 37,000 Bixi bikes in use around the world.
Bixi's financial troubles have been no secret, especially in Montreal, where the city made the unusual decision to get deeply involved with an international corporation, albeit a nonprofit one. Chicago and New York City's refusal to pay more than $5 million total to Bixi, because the cities found its software defective, appears to be have been the final straw that compelled the bankruptcy filing.
In most cities, Bixi was merely a supplier, not an operator of their bike share system. The exceptions were Montreal, Toronto and Ottawa, where Bixi operated the system as well. Toronto has already announced it will take over operation of the system, as will Montreal, where officials said they expect its operation to cost about $1.5 million this year, separate from the cost of the bankruptcy itself.
Although complete financial details have not been publicly released, the Montreal Gazette estimated that Bixi lost $4.5 million last year. The Gazette estimated Bixi owes its suppliers about $9 million.