Will the Big Bike-Share Supplier's Bankruptcy Hurt the Program in U.S. Cities?

January 22, 2014

The Canadian company that is the main equipment and technology suppliers for bike-sharing systems across the U.S. has filed for bankruptcy.

Public Bike System Co., (PBSC) which owns the widely used BIXI bike-sharing system, announced the bankruptcy Monday, citing almost $50 million in debt, as first reported by the Montreal Gazette. Its bikes and technology are used in 16 areas around the world, including major cities such as Chicago, New York, London, Montreal, and Washington, D.C.

After the bankruptcy was announced, Alta, a company that operates several BIXI bike-share systems in the U.S., said in a statement that its customers won't have their service interrupted. Alta says it plans to expand current systems and launch new ones this year.

PBSC's bankruptcy doesn't jeopardize bike-sharing, says Elly Blue, author of Bikenomics, a book analyzing the economics of cycling.

"I don't see this as being a very big bump in the road for bike share," Blue says. "I just see this as a chance for cities to learn — we can't run our transportation systems like a business, it doesn't really work that way because then we run the risk of not serving the people that need to be served."

PBSC attributes the bankruptcy partly to cities that have not paid it, including around $5.1 million from New York and Chicago. It is also in a lawsuit with the company that makes its bike-share analysis software.

The bankruptcy doesn't surprise John Pucher, who studies bicycling as a professor of urban planning at Rutgers University and who recently published a book about the cycling boom in cities.

"Looking at the operating data of the cost and revenues of the [bike-sharing] systems that I've seen, they vary from one system to another, but I'm just not convinced overall that it's a profitable venture," Pucher says. "It's not a big money maker the way they've set it up."

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