Bixi, the company that supplied the bicycles and stations for lauded bike sharing services in cities like New York, Chicago, and Montreal, has filed for bankruptcy, facing almost $50 million in debt it cannot pay. At the heart of its troubles is buggy software that has led New York and Chicago to refuse to pay millions of dollars, arguing that the promised upgrades to help track and analyze rides have not been delivered.
Montreal already bailed Bixi out once
Unfortunately for the citizens of Montreal, that may mean the hot potato comes to rest with them. The city bailed out Bixi back in 2011 to the tune of $108 million, and the company currently owes Montreal about $31 million on a $37 million loan it took to help finance its recent international expansion. Montreal mayor Denis Coderre admitted his mistake, saying the city should not have "embarked on commercial operations... it is not up to taxpayers to assume the financial risk involving a business plan."
Despite its financial woes, Bixi service will continue to roll out in Montreal through this summer. Service in areas like Chicago and New York — where Bixi supplied the hardware — is maintained by a company called Alta, which is also withholding millions in payments from Bixi over disputed services.
"Our systems across the country — in New York City, Chicago, Washington DC, Boston, the Bay Area, Columbus, OH, and Chattanooga, TN — are up and running and Alta Bicycle Share will ensure that they continue to operate without interruption," the company wrote in a blog post on the Bixi bankruptcy filing. "Having served more than 15 million trips to date, we’re focused on continuing to provide a convenient, fast, fun, and affordable means of transit."