Bad News for Bixi: Montreal Bike-Share Is Bankrupt

CC BY-SA 2.0. Shawn Carpenter

Bixi, the Montreal bike-sharing service that debuted in the city in pilot form in the summer of 2008 and filed for bankruptcy yesterday, has definitely had its ups and downs.

When the full Bixi program opened on Montreal's streets in 2009, it had 3,000 bikes and 300 stations, and was heralded as the coming of full-strength bike share to North America. Bixi (a combination of the words 'bike' and 'taxi') was popular, too, with 10,000 members and one million trips in the first year. Bixi's parent company thought its system would become a model internationally.

In its second season, the Montreal bike share was even bigger - more than 5,000 bicycles and 400 stations. But questions about the internal structure of the company behind Bixi surfaced quickly in local press, and Bixi's debt was feared to affect the city's bottom line economically.

By the end of 2010 Bixi Montreal had to restructure and get a big loan and line of credit from the city. In 2011 Bixi came back with a few more stations, and advertisements on the bicycles - a feature which many users hated.

The company did a round of employee layoffs in 2011. Bixi's management had expected software licensing deals to help pay for Montreal's Bixi system, and Toronto launched a Bixi system while New York and Chicago both bought some Bixi technology. Reportedly, however, software glitches lead New York and Chicago to withhold payment to Bixi.

In 2012 and 2013 Bixi raised the price of yearly memberships, and in 2013 Montreal announced Bixi was further beefing up the bike share service. But the company was in debt for as much as $42 million, according to the city.

Eventually, cash flow issues and the staggering debt caused Bixi to file for bankruptcy protection. But the mayor of Montreal says he will spend the US $1.3 million necessary to get Bixi open on schedule this spring - many members already purchased their 2014 membership.

While Bixi Montreal is a cautionary tale, the saddest aspect is that bike share should be cost-effective for cities and for consumers; let's hope the Bixi boondoggle helps cities make sure they do it right in future.