Montreal’s bike sharing service, BIXI, posted another deficit this year prompting some to wonder if it will ever turn a profit.
BIXI has yet to turn a profit in the three years since it’s been operating, despite huge increases in riders.
The program is expected to run a deficit of $3.5 million this year. That’s half the amount from 2010, but BIXI has been running in the red since the bikes hit Montreal’s streets in 2009.
“Is it possible to manage the system with half the money?” wonders Projet Montreal leader Richard Bergeron who believes right now it’s too expensive to run.
The number of users is increasing. Ridership is up 25 percent this year. 40 thousand people now subscribe to the service on an annual basis, but that’s not enough to peddle BIXIs out of red ink.
Roger Plamondon, the man in charge of BIXI, insists the program is making financial progress. He expects to balance the books next year,if 50 thousand users sign up.
“As we’ve always stated that we need a certain maturity,” explains Plamondon, “a certain membership level to break even.”
The service is the brain child of Montreal mayor Gerald Tremblay. It operates as an independent entity from the city, but it relies on Montreal taxpayers to keep it on the road.
The city has already put up $37 million in loan guarantees and another $70 million in credit to help BIXI’s exporting campaign.
“Yes there is a debt,” says Plamondon, “but we have a plan to repay the debt.”
Plamondon won’t be around to see that debt paid off. The CEO has announced he will be stepping down next year because the government is forcing him to sell off the exporting division of the BIXI network.
Plamondon says once he leaves he expects it to be swallowed up by a city agency, perhaps the Montreal transit corporation. At which point he thinks BIXI won’t have any say over how it operates its budget.
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