Bixi: debts, anyone?

In this news article, the Bixi bike system’s owner “has provided the City of Toronto with a network of bikes throughout the downtown core.” Apparently, trips of less than thirty minutes will be free. One picks up a bike, prepares to pay (credit card), and drives to another Bixi station. There are 80 locations, 1000 bikes, and 1500 slots to put them in.

Frequent users have more convenient options. Details are in the above-linked web page.

Apparently, everywhere Bixi runs, it is subsidized. “In cities across North America — New York, Minneapolis and Chattanooga among others — Bixi was launched and continues to run through government subsidies and grants.” However Toronto was told that “it could break even — and maybe turn a profit — with 1,000 bikes and 80 stations without a dime of city money. All the city had to do was guarantee a start-up loan.” You can find this promise here. In this article you will also find that the city is being urged to take Bixi over, as it is losing money and has not repaid its (actually our) loan. We, the city of Toronto, guaranteed a $3.9 million loan.

Now Bixi wants us to pay for an expansion to 3,000 bikes, and seems to think Toronto will pay for this, even though council has made it clear that we will not. Allowing the company to fail is an option; the assets in Toronto are estimated in the order of a million dollars. We’ll be stuck with the rest of the loan, I guess.

To make this more interesting, Bixie now wants the TTC to partner with it. You can find the details here. As any Torontonian knows, the TTC is absolutely strapped for cash, trying for transit expansion, changing its mind re LRT versus subway. Which is a subject for another post.

Now for the dumb questions. Exactly how did we get into this mess? Bixi is subsidized everywhere else, and losing money here. Could this not have been predicted? Bixi wants us to triple-down on our bets, by multiplying up the number of bikes, and presumably stations, by three. Is there any reason to believe in economies of scale here, or will the losses simply multiply up as well? Should the TTC scrape money away from other projects, badly needed extensions, for Bixi bikes? Want to lend them more money? Debts, anyone?

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