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Other bike-share companies ready to jump into Vancouver if Alta/Bixi deal falls through

January 23rd, 2014 · 217 Comments

As news of Bixi’s request for bankruptcy protection washed across North America this week, there was a lot of bike-share angst. Also, confusion. A lot of people think that Bixi = bike-share, so therefore if Bixi if having troubles, bike-share everywhere must be doomed to failure.

I note that B-Cycle (currently operating in 21 cities) felt obliged to post this statement on its website:

While all of us at B-cycle regret the unfortunate news that PBSC has filed for bankruptcy we feel it is important to note that this occurrence is not an indication of the future of bike share. B-cycle has implemented successful bike share systems in 30 locations in both North and South America and continues to work with a growing number of cities looking for more sustainable transportation options, most recently installing systems in Santiago, Chile and Austin, Texas. Largely owned by Trek Bicycle, one of the world’s most successful bicycle companies, B-cycle is financially stable and operates under a fiscally responsible business model that delivers results for all of our systems. We believe the future of bike share is bright and look forward to bringing sustainable transportation to more of the world for years to come.

Back here in Vancouver, the Bixi mess was a reminder that there WERE other bidders interested in providing a bike-share system for Vancouver. Six expressed interest when the city called for proposals back in 2011 (not last year, as I mistakenly said). One was a local consortium that included a Richmond company that is doing bike-share hardware for Miami Beach, Oklahoma, and Sao Paulo, Brazil, among other places.

I did a story for the Globe yesterday that explored what might happen next a little.

This morning, I also got a message from another person unhappy about Vancouver’s commitment to what seems like a floundering Alta deal.

His comments:

In the nearly three years since this RFEOI was released, much has changed with the bike share industry, as you might expect with any nascent industry, especially one that is effectively technological in nature.

The City of Vancouver continues to negotiate exclusively with Alta behind a curtain — there is no contract, only a continued commitment by the City to negotiate exclusively. If the City has wants to implement a bike share program it should be done openly and transparently, to the benefit of the city and its citizens. It is time for the City to re-open the bidding process.

 

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  • Bill

    @Jeff Leigh #199

    “Your comment was that there weren’t any precedents yet, this whole bike share thing was all too new.”

    No, my comment was that we, like the 6 other bike share systems listed in the Globe, selected Alta to operate our bike share system using Bixi technology presumably based on a study that identified it as better than any alternatives. The article identified that 2 of the other bike share systems were yet to be launched and 3 were less than a year old. Bixi files for bankruptcy protection in January owing $40 million and identified that “part of the issue in the bankruptcy was that Chicago and New York were withholding $5 million in payments because of software issues with the docking stations.” So of the 3 systems launched in the last year, two were experiencing significant enough issues to warrant withholding significant monies owing.

    Quite simply, Jeff, there is a significant problem with the Bixi business model that has hemorrhaged millions of dollars for years (The City of Montreal arranged a $100 million bailout package in 2011). Without an extensive analysis of what went wrong there is no way of knowing the true cost of the bike share systems that were launched using its technology. Why spend time and resources on this issue now?

    As for your example of Paris, it had absolutely no relevance unless you can show how its’ financial model can be implemented here. If our system was to be funded by the private sector like in New York, without the buried subsidy like in Paris, you might have a case to argue but for the City to consider committing $20 million of taxpayer money would be grossly irresponsible.

  • Jeff Leigh

    Yes. Moving ahead with bike sharing whether or not Bixi goes bankrupt, as compared to Vision Bad (references to Green Cities, urban greenhouses by Alterrus, Olympic Village, Obama, Solyandra, engaged cities, keeping chickens for eggs, green roofs) and miscellaneous diversions to car sharing, seat belts, CoV being a helmet provider, there not being enough global experience with bike sharing, and so on.

    Off Topic doesn’t appear to be a phrase used here, unlike many other discussions on the web.

  • Jeff Leigh

    @Bill #201

    The article posted originally said that Bike Share could go ahead without Bixi, that there were per alternatives.

    I suggest that looking to successful bike share operators is entirely relevant.

    Why haven’t we implemented the Alta system? CoV says it is because they (Alta) have been told to submit a business plan and the city is waiting. Looks like you and the city are in alignment.

  • Bill

    @Jeff Leigh #203

    “Looks like you and the city are in alignment.”

    I don’t think that would ever be possible.

  • teririch

    @Jeff Leigh #197:

    The Paris Veilb bike system is far from the shining example.

    9,000 lost/stolen/vandalized bikes over a one year period and at a huge cost to the city isn’t exactyly a ringing endorsement along with the fact that they are pulling back on expansion.

  • Chris Keam

    This quote (below) is from the article quoted once in post #33 and again in #47. I don’t think Paris’ theft and expansion issues should be the focus of comparison between that city’s bike share issues and the challenges Vancouver’s is facing.

    “What makes this crime wave more striking is that by contrast, London’s bike-share system has seen only 143 thefts since it began in 2010. So why are Paris’s figures so terrible compared to its northern neighbor?

    The answer lies partly in the sheer ambition of Vélib’. With 12,000 docking stations, it extends beyond the boundaries of Paris Intramuros and out into the suburbs of the Petite Couronne area of greater Paris. This means that, unlike London’s scheme, which limits itself to a central area, 8,000 bikes and a meager but more easily monitored 570 docking stations, it’s of real use to suburban commuters.

    Unfortunately, it’s in Paris’s outlying districts where most theft and vandalism is taking place, with incidents clustering in the relatively lower-income 18th, 19th and 20th arrondissements that form a crescent around northeast Paris. There’s also far less video surveillance in Paris. While London’s public spaces are all but saturated with CCTV cameras, many of Paris’s bike-share stations are not monitored, directly or remotely.”

  • Jeff Leigh

    @Teri Rich #205

    The Paris Velib system wasn’t held up by me as a shining example of all that is right. It was held up as an example of one system that could be studied, where real data is available, when it was suggested by Bill that we should wait until others do this first o we can learn from them. I am sure there is good and bad about the Paris system, and it is possible to learn from both the good and the bad. In fact, the Vancouver city staff report submitted to council talked about learning from other city’s experiences.

  • Waltyss

    Bill @ 204. I guess being on the same page as the CoV on anything would destroy your street cred with your fellow Vision haters. Amusing but instructive.

  • Bill

    @Jeff Leigh #207

    I see you are taking a page out of the Chris Keam playbook and skillfully avoiding the issue of the Paris subsidy where the City is effectively paying for bike share with their valuable billboard space.

  • Jeff Leigh

    @Bill #207

    As compared to the playbook described in post #202?

    Faced with the alternatives of a city subsidy or a sponsor, I would like to at least be able to evaluate the sponsorship alternative. You know, have the information before making a pronouncement. What is that playbook called?

  • Bill

    @Jeff Leigh #210

    My point is that Paris, that you raised as an example as a success, is a city subsidized system and not a corporate sponsorship although it has been cleverly disguised as one. Now if someone with deep pockets came forward and agreed to underwrite and take on the risk for the system at no cost or risk to the city, then I would say go for it.

  • Jeff Leigh

    Bill, please review my posts.

    I never said the Paris Velib system was a success. I am not qualified to judge it. You had said there were no sources of information on how bike share has been implemented, no systems to look at and learn lessons from. I gave you an example. It is a data source. All I did was qualify it as an operating bike share system with some years of history. There is probably good and bad about it.

    If you feel that the Paris Velib system has been a failure then you are entitled to that opinion. But not to deny its existence. Everybody is entitled to their own opinion, just not their own facts.

  • Bill

    @Jeff Leigh #212

    I guess I really need to spell it out for you.

    History is a necessary condition for assessing the success of a particular program. The bike share programs that Chris provided had little to no track record so were of no in demonstrating that Vancouver’s choice of an operator had a reasonable likelihood of success.

    But history is a necessary condition and not a sufficient one so while your example of Paris had history, a five minute review revealed that its business model was of no use in assessing Vancouver’s choice since it was dependent on a public subsidy of a substantial but unquantifiable value.

  • Jeff Leigh

    @Bill #213

    This thread has covered bike share system implementation, Bixi, software, helmets, bike thefts, vandalism, locations, and so on.

    You appear to be focusing exclusively on the sponsorship side of it. I am talking about bike share systems overall, of which sponsorship is but one piece.

  • Bill

    @Jeff Leigh #214

    “You appear to be focusing exclusively on the sponsorship side of it.”

    No, I am focusing on the financial side of the equation because if you don’t know how much it will cost or don’t have the money to pay for it, the rest doesn’t matter.

  • Bill Lee

    Bixi in court

    Ex-allies contest Bixi request for 45-day extension on creditor protection

    Judge to hear last-minute bid by Alta Bicycle Share and 8D Technologies to block endebted bike-sharing service

    By Andy Riga, Gazette Transportation Reporter February 18, 2014 8:26 PM

    “MONTREAL – Bixi posted a net loss of almost $6.5 million in 2012, a figure the bike-sharing company has kept secret until it was compelled to make it public during a bankruptcy hearing Tuesday.
    The veil of secrecy was also lifted on other aspects of Bixi’s business, which was bankrolled by city of Montreal taxpayers who had been left in the dark.

    Among the details that emerged are the offers made by two buyers of Bixi’s assets.”

    ….”Then, in December, Alta Bicycle Share offered to buy the company in a deal under which it would have taken on all of Bixi’s debts, Massi said.

    At last count, Bixi’s debt was $46 million.

    That Alta deal fell through because Bixi asked Alta to prove it had the financial capacity to pay, and Alta never produced the proof, Massi said.

    Alta said it backed out after taking a closer look at Bixi’s books.

    The details were divulged during a hearing into Bixi’s request for a 45-day extension of its bankruptcy protection, which expires Wednesday.

    What had been expected to be a rubber-stamp court appearance turned into a review of Bixi’s finances. The hearing continues Wednesday.

    Alta, New York City Bike Share and 8D Technologies are contesting the extension.

    Alta and 8D are former Bixi allies. Alta operates NYC Bike Share.

    After business disagreements and Bixi software glitches, the relationship soured and Alta and 8D recently formed an alliance to compete against Bixi.”

    “The financial figures and offers to purchase Bixi that were revealed Tuesday help explain why Bixi thought it was turning the corner.

    In 2012, despite the significant net loss, revenue jumped 42 per cent, to reach $45.2 million.

    Last year, revenue continued to soar, hitting $63.1 million, with the net loss dropping to $757,000.

    But in a document prepared for the court, Massi said Bixi, which has posted losses every year since it started in 2009, hit a wall in 2013.

    There are 37,000 Bixi bikes in 17 cities around the world, but international sales revenues were never able to cover loses, Massi said.

    He cited “significant cost overruns” in developing the new software, as well as the legal dispute with 8D.

    In addition, cash flow became a big problem after New York City and Chicago refused to pay Bixi in full. Both cities held back payments because of the software problems.”
    MORE
    http://www.montrealgazette.com/news/montreal/allies+contest+Bixi+request+extension+creditor/9519969/story.html

  • Bill Lee

    City of Montreal buys Bixi’s local assets for $11.9 million
    By Christopher Curtis, THE (Montreal) GAZETTE February 19, 2014 4:08 PM

    MONTREAL – Montreal’s executive committee voted Wednesday to buy Bixi’s $11.9 million in local assets, committing to keep the bike-sharing service running through 2014.

    Mayor Denis Coderre said the plan is to turn Bixi into a non-profit organization.

    “Since it was launched, Bixi contributed in a big way to spreading the practice of cycling in Montreal,” Coderre said in a news release. “Our administration made a decision to maintain this service in the interest of its users, but also (in the interest) of the taxpayers.”

    The Montreal-based company and its international arm have posted losses in every year since its foundation in 2009 — most recently revealing a $6.5-million shortfall in 2012 and $750,000 in 2013. Bixi filed for bankruptcy last month and is still seeking buyers for its international operations.

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