Posted on May 18, 2011
Bixi update: when a $37 million cash injection is good news, a sign of success
While the public popularity of bike share programs is not in doubt — there are about 200 around the world — their ability to turn a profit remains a very large question mark. That’s why the very large cash crisis at Montreal’s Public Bike System Co., the operator of the city’s Bixi system, is making waves around the internet.
But according to one knowledgeable observer on Velolove, one of the city’s most active cyclist listservs, the $37 million bailout with $71 million in loan guarantees is good news.
The one-time project of the the Montreal city parking authority is now heading out on its own, so the cash injection will wipe out accumulated debt while the loan guarantees will drive down future borrowing costs. Bixi is in the middle of a major expansion in cities like New York, Toronto and San Francisco, even though it was hours from coming off the streets in Montreal until Monday’s bailout.
Not all Montreal councillors are convinced Bixi can roll on, but in Toronto, where Bixi is just launching, everyone remains upbeat. Stay tuned: the Montreal firm is still predicting several years of losses before moving into the black.