Public Bike System Maker Bixi Files for Insolvency
MONTREAL, Canada – Last week PBSC Urban Solutions – better known under the name of its public bike system Bixi – filed for insolvency. The Canadian non-profit company met with financial problems after Chicago and New York refused paying their bills for installing Bixi systems. Software problems caused that.
The Chicago and New York refusal of paying their bills leaves PBSC Urban Solutions with a financial gap of USD 5.6 million. That both cities don’t pay is because the system doesn’t function properly.
Users have to use their credit cards to rent a bike. Serious software problems is hampering that usage. These problems is also causing other cities to reconsider installing public bike systems. Vancouver for instance is now reviewing its proposed but already delayed Bixi bike share system.
Public Bike System Company (PBSC) Urban Solutions’ insolvency means that it is currently financially protected under the Bankruptcy and Insolvency Act. It has now 30 days to restructure the business and its finances. This could be extended up to six months. During this period the company will remain operating. It is said that it will raise money by selling its international activities.
37,000 Bixi bikes
Currently PBSC Urban Solutions is operating Bixi systems in ten major cities as well as in some other towns. More than 37,000 Bixi bikes are available at 2,676 rental stations around the world. After building its rental system in London and Melbourne it was the company’s goal to rapidly increase it business outside the Northern-American market.
“The capacity for rapid global implementation is one of the key principles governing any alternative urban transportation project we undertake,” is noted on the company website www.publicbikesystem.com.
City of Montreal biggest creditor
The non-profit company PBSC Urban Solutions is controlled by the City of Montreal. Therefore Montreal is the company’s biggest creditor by far. According to mayor Denis Coderre Bixi owes Montreal – including all loans – a total of CAD 48 million (€ 31.6 m). There are 139 other creditors for a total amount of CAD 46,1 million (€ 30,4 m) according to receiver Richter Advisory Group.
Biggest creditor are the City of Montreal for CAD 36.6 million; software developer Personica Inc. and the operator of the Bixi system in Montreal, JFG Logistique Inc. each CAD1 million followed by Bixi bike producer Cycles Devinci Inc. for CAD 844,000 and the drivetrain producer CMP Advanced Mechanical Solutions Inc. for CAD 728,000.
At this moment PBSC Urban Solutions is restructuring, but additional investments are needed. Montreal mayor Denis Coderre hopes to find an investor that is willing to invest into the “good idea” of a public bike system and turns the business around. Presently all the Bixi systems worldwide are continuing their operations. And the 66 employees at the PBSC headquarters in Lachine, Montreal are working as usual.