Sunday, 21 April 2013

I'm saying "no" to Bixi

It looks like the folks at Bixi have got themselves into a bit of trouble.

The release of a confidential business plan to city staff and councillors reveals Bixi made Toronto a great deal of promises.

If Toronto agreed to guarantee a $4.8 billion loan, than Bixi (an arms length agency funded by the taxpayers of the City of Montreal) would set up 80 stations with 1000 bicycles. Revenue would be raised from sponsors, subscribers, and one-time riders. This was to be enough to cover operating cost within a decade while turning a profit; to be shared at a 50/50 split.

Now Mayor Miller's giving in to Toronto's bike lobby stands to cost taxpayers millions.

As Chair of the Public Works Committee Denzil Minnan-Wong puts it, "I think we got hosed."

A mere two years following the launch of the program, Bixi Toronto in heading towards bankruptcy. The trend is reminiscent of Bixi projects the world over. In Melbourne, New York, Chicago, D.C., Minneapolis, etc. bicycle rental programs are turning to governments in seek of subsidies to stay afloat.

In the case of Bixi, we are looking at a company that has never turned a profit - even with a 2011 bailout from the City of Montreal to the tune of $108 million.

Now Bixi is approximately $100,000 short of breaking even on its $1.5 million operating expenses. Staff feel this gap can be closed. But this would entail the City of Toronto taking on full responsibility for a deficit inducing asset; much like the Toronto Transit Commission.

This would be inadvisable. Bixi may be seen as a environmental initiative, but the costs associated to a government constantly struggling to come in under budget are just too great. I encourage people to cycle as often as possible - just not at the estimated $3 million annual cost to the taxpayers to keep Bixi afloat in our city.

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