Bixi—the Montreal nonprofit company that powers New York City's nine-month old CitiBike program—filed for bankruptcy protection today, after it emerged that the company is deeply in debt. So, will all of those vitriolic bike share haters finally get their way? Maybe—but not just yet.
According to a report in the Montreal Gazette, Bixi owes $29 million to the city of Montreal, which controls the nonprofit, and $8.3 million to its suppliers.
How did things get so bad, in a seeming boomtime for urban bike shares? Though Bixi has been in financial trouble for years (Montreal spent $108 million to bail it out in 2011), this new wrinkle stems from a January 15th letter from the city, demanding that Bixi repay a longstanding debt. Bixi was unable to comply, partially because cities that use its technology, like New York and Chicago, are refusing to pay up. Why? Because they're upset about Bixi's glitchy, slow software updates. "They are not happy with delays in promised updates in back-end software," reports the Gazette. New York City owes $3 million, and Chicago owes $2.6 million.
Could this affect New York's CitiBike program? Maybe. Bixi's technology is operated in the US market by Alta Bicycle Share—the company that manages New York's program, as well as eight other US bike share programs. In an October statement from Alta, Vice President Mia Birk told The Atlantic Cities that "No matter what happens with [Bixi], Alta Bicycle Share will continue now and in the future to provide world-class products and services to our clients," though she declined to detail what will happen if the parent company goes belly up.
Bixi has 30 days of bankruptcy protection right now, and that could extend for up to six months if the company requests it. Even if Bixi does end up folding, CitiBike—which is funded in part by a $40 million sponsorship from Citi—only licenses their system, and they could switch to an alternative system from a competitor.
So don't mourn for CitiBike just yet—after all, with as many as 40,000 rides a day, New Yorkers aren't likely to let it go quietly into that good night. [Montreal Gazette]
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The Company Behind CitiBike Is Going Bankrupt. Now What?