Photo by Ben Spurr
Bixi bikers can ride easy.
Toronto's indebted bike-share program looks set to continue operating normally at least until July, following a vote at Rob Ford's executive committee on Tuesday to restructure the city's relationship with the company.
The substance of the vote remains confidential, pending on the city reaching a new agreement with Bixi Toronto. A report is expected back to the executive on July 3.
But according to executive member Councillor Denzil Minnan-Wong, the committee gave instructions to staff that he hopes will ensure the survival of the program, as well as prevent taxpayers from being on the hook for the city-guaranteed loan Bixi took out to launch the venture in 2011.
"The objective is to have Bixi continue and to have an arrangement that is satisfactory to both parties," said Minnan-Wong after the vote.
"There are two public interests here: to pay attention to the taxpayers' investment so that we don't have any other unnecessary financial exposure. And the other thing we want to try to do is... maintain the bicycle rental program. I think the public sees value in that."
Just two years after rolling out on Toronto's roads, Bixi is in deep financial trouble. Despite signing up 4,630 paid subscribers and logging 1.3 million trips in its first 18 months, it is struggling to repay the $4.5 million loan it used to fund its initial capital costs, and its user fees are reportedly not covering day-to-day operations.
The company is wholly owned by the Montreal-based Public Bike Systems Company, and is not funded by the city of Toronto. But the city guaranteed the $4.5-million loan, and if it's not repaid Toronto would be liable. As of December 31, 2012 $3.9 million of the loan is still outstanding.
Speaking to the committee Tuesday afternoon, Jared Kolb of bike advocacy group Cycle Toronto urged the city to come to Bixi's rescue. He argued that the system is a public good and should be run like the TTC, with its operating costs heavily subsidized by the taxpayer.
There is untapped demand for Bixi, he said, and if the system were given the cash to expand beyond its current 1,000 bikes and 80 stations in the downtown core, it would generate more user fees and could eventually become more profitable.
"What we're asking is for this city to take control of the system and to invest in it," he told councillors. "Send a strong message to members, to sponsors, and to Torontonians that it's behind this program. And develop an expansion plan."
But it is unlikely that fiscally conservative councillors on the executive committee would support using public money to save the company. Mayor Ford has said he would not subsidize it.
According to one source, the executive's confidential instructions to staff directed them to find a third party to assume responsibility for Bixi Toronto.
While she wouldn't comment on the details of the committee's instructions, Councillor Janet Davis complained that they had "limited" the city's options to save the bike-share system.
She said that the decision was important enough that the executive should have referred it to council. But she's optimistic that Bixi's days are far from numbered.
"I think there's a recognition of the need to continue a bike program," she said. "And we will continue to see Bixi operating between now and any long-term decisions on the future of the program."