Despite Financial Concerns, Cities Are Doubling Down on Bike-Share
Ongoing financial problems at PBSC (also known as Bixi), the Montréal-based bike-share equipment company, continue to ripple across North America. But even so, the continuing popularity of bike-share with the public is leading cities with PBSC contracts to call for expansion of their systems.
The hope among supporters in places including Toronto and New York is that with revised business models, bike-share can solidify its position as an integral element of the urban transportation menu.
According to the most recent public figures, PBSC, which is owned by the city of Montréal, is $42 million in debt, with a $6.5 million deficit and $5 million in outstanding payments. In September, the auditor general of Montréal expressed doubts over the company’s ability to continue operations. Last month, client Nice Ride Minnesota filed a notice of material breach of contract over long-standing disputes about software development, although at the time, Nice Ride officials emphasized that they hope to resolve the issues and that “Nice Ride values its relationship with PBSC and is optimistic that PBSC will restructure successfully.” In Vancouver, meanwhile, worries about PBSC’s financial stability might shut down the rollout of that city’s program altogether.
The sometimes complicated deals cobbled together by cities seeking to implement bike-share have been problematic, especially when the notoriously opaque PBSC is involved. In Toronto’s case, PBSC manages the system as well as providing the bikes and docking stations. And apparently, the company is having as much trouble balancing the books there as it is overall.
PBSC, which supplies systems in London, Melbourne, Washington, D.C., Chicago, and many other municipalities, brought Bixi to Toronto in 2011, backed by a $4.8 million loan guarantee from the city. But PBSC hasn’t been able to make payments. According to the Toronto Star, if it defaults, the city will be out $3.9 million in outstanding debt.
Toronto councilor Denzil Minnan-Wong told me in October that he thought scrutiny of the PBSC deal had been insufficient at the outset. “One of the problems with the bike-share system in Toronto is there wasn’t a clear understanding about what we were getting into,” he said. He also questioned the motivations for getting bike-share. “There’s an attraction to be a city that has bike-share because that’s what all the cool kids have.”
Still, Minnan-Wong said that the program has proven popular both with the public and many Toronto lawmakers. “There’s a real appetite on our council to keep Bixi,” he says. But the business model, he says, is broken. “It has to be recognized as a form of transit,” he says. “And as we know, no form of transit breaks even. It requires a subsidy.”
Despite the shaky financial start for Toronto Bixi, the city council on Thursday took a break from the tabloid-worthy drama being played out by its mayor, Rob Ford, to vote to continue the program. Not only that, the city is actively negotiating a deal, the details of which remain confidential, to take over and expand the bike-share network.
"This is a part of the public transit system and we see it as such," said Kristyn Wong-Tam, a councilor who has been working on plans to save the Toronto system.
Wong-Tam’s remarks echoed sentiments voiced by Brad Lander, a New York City council member who has been a big supporter of the Citi Bike system. Until now, one of the selling points of the New York system, which logged 5 million trips between its Memorial Day launch and the beginning of November, is that it has required no public dollars, relying entirely on sponsorship money to get up and running.
But Lander told me in October that he would be interested in seeing a renegotiation of the funding model with the new mayoral administration if that meant expansion of the system. So far Alta Bike Share, which manages the Bixi-based system in New York, and the city’s department of transportation have both been vague about the timetable of promised expansion of the Citi Bike system (although recent reports point to another 4,000 bikes on the way).
Lander would like to see Citi Bike in more neighborhoods, he said, and he doesn’t have a problem with using taxpayer dollars to that end. “To me, if it’s a piece of public infrastructure, it’s appropriate to pay for at least part of it with public money,” he said. “I don’t want our ability to have bike-share contingent on a private investor who’s willing to make it happen.” Lander added that public funding would mean more public oversight as well.
According to a recent survey of 1,500 Citi Bike users by advocacy organization Transportation Alternatives, 91 percent support the use of federal transit dollars to expand it.
In cities across the United States and Canada, bike-share has quickly proven its popularity and potential utility as an element of the public transit system. While the tax code has yet to catch up in the U.S., in cities with good systems, more and more people are using bike-share to commute as well as do errands. For many, it’s a great solution to the last-mile problem. Now it’s time for the funding models to evolve along with the infrastructure.
Top image: The Toronto Bixi system, via Flickr user Loozrboy