BIXI Toronto is having financial trouble, and the city is looking for a way to keep the bike-loaning operation going, according to a report by city staff.
The company that owns BIXI Toronto is divesting itself of its franchises, said chair of the city's Public Works committee Denzil Minnan-Wong in an interview Tuesday.
"It's looking to get rid of BIXI Toronto," he said of the amenity that has 80 stations around the city, which allow people to pick up a bike and return it to another location near their destination, for a fee. Some users pay a $97 annual subscription fee.
An item on the executive committee agenda for April 23 shows the city is considering restructuring its 10-year business plan with BIXI Toronto. The summary of the item says that although the bicycle program has been somewhat of a success, it is having difficulty covering its operating costs.
BIXI Toronto Inc. borrowed $4.5-million from the city, and has a loan balance of $3.9-million as of Dec. 31, 2012, according to the item. The company, which has been operating in the city for two years, also faces difficulties making money during the winter months. BIXI has similar programs in Montreal, London, and the Ottawa-Gatineau area.
Mayor Rob Ford called the financial troubles "unfortunate."
"That's why I am always careful when people come and ask us for money," he said Wednesday.
"I've always been a little reluctant," he said later when asked if the city should be involved in such ventures. "Sometimes you have to, but there has to be guarantees in place if they can't pay. I want to find out what guarantees were in place when we got into this agreement."
Cycle Toronto released a statement Tuesday night calling on the city to not only purchase BIXI, but to also expand the program. Executive director Jared Kolb said in the statement that BIXI Toronto is "an important part of our transit system."
"BIXI provides Torontonians with a convenient, practical alternative to transit for short trips, allowing them to bicycle to their destinations," Mr. Kolb said. "We need to invest in and expand the BIXI system."
Cycle Toronto says the city of Toronto should buy out the remaining loan balance of $3.9-million and take ownership of the program.
In Montreal, the company garners a $7-million deficit each year, and last year owed about $37-million to the city, according to a report by the CBC. BIXI did not respond to requests for interviews.
"BIXI Toronto's business model is not working right now. The city and BIXI have to find a way to make it sustainable," Mr. Minnan-Wong said.
He suggested that there is a need to come up with a business plan that would make it financially sustainable and "not a drain on the city's finances."
Since the program was launched on May 3, 2011, there have been 4,630 paid subscribers and more than 1.3 million bicycle trips have been taken.
With files from Elizabeth Church