Why Bixi ran into trouble - Macleans.ca

Why Bixi ran into trouble

It piled on a mountain of debt to expand

by

Jessica Darmanin

The Bixi bike-sharing service—made in Quebec and exported around the world—has filed for bankruptcy protection, a seemingly inevitable step after years of pedalling from one fiscal headache to the next.

Funded by Montreal taxpayers, the Public Bike System Co. has sold its environmentally trendy concept to major centres such as New York, Chicago and London, winning multiple awards along the way. But mounting debt loads and embarrassing technical glitches have crippled the firm, to the point where Montreal’s auditor-general recently expressed “serious doubts about Bixi’s ability to continue operations.” (In December, Toronto became the latest city to take control of its money-losing bike share, fearful Bixi would otherwise renege on a $3.9-million loan.)

When the city of Montreal sent its own letter to Bixi on Jan. 15, demanding payment on its $31-million loan, the company filed for bankruptcy protection instead. All told, Bixi says it owes $50 million to various creditors—while continuing to insist its business model is still viable and worth saving.