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Wednesday, January 22, 2014

Bankruptcy Case Lifts Curtain on Bike-Share Operator | NY Times

OTTAWA — The bankruptcy protection filing of the Canadian company that has supplied the bicycles and the technology behind most of the bike-sharing programs in major American cities is revealing a complicated and messy financial foundation.
No one anticipates that systems like Chicago’s Divvy or New York’s Citi Bike will collapse because of Monday’s filing by the Société de Vélo en Libre-Service, a company usually called Bixi. But its roots inside Montreal’s municipal parking authority led to the creation of a company whose product, while quickly proving popular with riders, was doomed never to make money.
Court documents and interviews with suppliers, customers and politicians show that Bixi’s acumen with technology and design has been undermined by an often ad hoc approach to business and a lack of a clear mandate. One of the Bixi mysteries is its relationship with its agent in the United States. Unlike the three Canadian cities with Bixi systems, Ottawa, Toronto and Montreal, American municipalities have generally not dealt directly with the Canadian company. Instead, Alta Bike Share, a relatively small company in Portland, Ore., sells the Bixi system and operates it.
Michel Philibert, the acting chief executive of Bixi, declined to discuss the relationship between the two companies, citing contract confidentiality. In court filings, however, Bixi has repeatedly described Alta as a “partner.” Officials at Alta and its parent company, Alta Planning & Design, did not respond to several interview requests about its contractual relationship with Bixi.
In an email, Mia Birk, president of Alta Planning & Design, said that the filing had no effect on the operation of existing systems, nor had it altered Alta’s relationship with Bixi’s bicycle supplier, and that it should not delay a coming introduction in Portland. “Ultimately,” she said, “we are confident that this will be a positive result.”

[Keep reading at NY Times]

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