Bixi needs more users and fast: mayor
Published Friday, May 2, 2014 3:24PM EDT
Last Updated Friday, May 2, 2014 7:48PM EDT
Mayor Denis Coderre says it’s use-it-or-lose-it time for Bixi.
The current 35,333 subscribers is down by about 20 from last year at this time and that’s not enough to keep it going after this year, Coderre said Friday morning in a plea for more users on the 2014 launch of the service.
Coderre did not offer a target number that would save the service, however.
The mayor praised the efforts of the new administration of the nonprofit organization that will manage the service and he thanked the main sponsors who remained on board.
He added that if the public doesn't fully embrace the service this year, administration would eventually have to make a financial decision, implying that the Bixi could possibly be abandoned.
Bixi's Montreal season officially started Tuesday, with 2,000 bikes. The remaining 3,120 bikes are to be added before the end of April.
The transfer from the Public Bike System Co. - the city-bankrolled company that created Bixi - to the City of Montreal was approved by Superior Court Justice Mark Schrager on Tuesday, which means that Montreal taxpayers will own 5,120 Bixi bikes and 461 bike-sharing stations.
Bixi had been under bankruptcy protection since January.
On Tuesday, four of Bixi's suppliers - Cycles Devinci, CMP Advanced Mechanical Solutions, CIF Métal and Groupe Poitras - tried to block the transfer, arguing the process had not been fair and reasonable but in the end, they dropped their opposition.
Bixi has debts of about $44 million. The city is by far its biggest creditor and the only secured creditor.
Montreal is owed about $31.8 million on a loan and had guaranteed an $8.2-million loan that Bixi cannot repay, for a total of $40 million.
The local assets are to be taken over by a new non-profit company recently set up by the City of Montreal to run Bixi Montreal this year.
Mayor Denis Coderre has said that Bixi's long-term future will be decided later, based on the popularity of Bixi this year and how much it costs the city to operate it.
The official transfer of ownership to the city is expected next week.
Last week, a judge approved the sale of Bixi's international arm - which sells bike-sharing systems to cities around the world - to Longueuil furniture mogul Bruno Rodi for $4 million.
Soon after the sale was approved, Rodi received at least three offers to buy the international business but declined, a source said.
Rodi, whose penchant for travel has taken him to 200 countries, has been out of the country and will only return to Canada on Friday.
That's the day when he is expected to sign the final papers to take control of Bixi international.
As owner of that business, he will get all of Bixi's non-Montreal inventory, as well as its intellectual property (designs, drawings, specifications, patents and licenses).
Most of Bixi's contracts with other cities will be cancelled. Rodi will only retain two contracts with cities that have yet to receive bikes.
One, worth about $500,000, is for a small system in Dubai. The other, in Guadalajara, Mexico, is for 1,200 bikes and is worth about $5.5 million.
The $4 million from the sale of the international operations will go to the city. Bixi says local bikes and stations Montreal is getting are worth an additional $11.9 million.
That means the city will walk away with about $15.9 million in cash and assets.
The way Montreal calculates it, that means the Bixi adventure will have cost taxpayers $24.1 million ($40 million minus $15.9 million).