Bike-sharing faces bankruptcy: cities withhold money as Bixi struggles

The future of bike-sharing, which relies on GPS and chips to offer a new form of urban transportation, may be in jeopardy after the Montreal company behind many big cities’ bike-sharing programs filed for bankruptcy on Monday. As the Montreal Gazette reports, Bixi owes suppliers $9 million CDN and up to $38 million CDN to Montreal taxpayers who provided the company with loan guarantees and lines of credit. ($1 CDN = $0.91 USD)

Bixi’s problems appear to stem in part from foreign cities’ decision to withhold payments over dissatisfaction with the company’s failure to update software. According to the Gazette, New York City is holding back $3 million while Chicago is refusing to pay $2.6 million.

Those cities, along with other big urban centers like London and Toronto, have in recent years decided to embrace Bixi bikes, which can be rented on an hourly basis or through annual subscriptions. It’s unclear what will happen to the programs in light of Bixi’s troubles. The city of Montreal reportedly plans to keep the program running this spring while Bixi looks to divest its foreign operations.

New York City’s CitiBike program, which offers bike-sharing in part through a large sponsorship from the bank of its name, did not immediately reply to an email request for comment.

Bike-sharing programs have won supporters in many cities as an emerging form of cleaner transportation, as a tourist attraction, and as a way to employ GPS and big data technology to gain new insight about urban mobility.