No, Bixi Montreal is not profitable
This weekend, Montreal’s bike-sharing system will launch its ninth season.
While Bixi Montreal is popular among some Montrealers, it continues to be a money-losing service, costing taxpayers millions of dollars a year.
It is also far from clear that it has done anything to encourage active transportation.
Since its creation in 2009, Bixi has survived thanks to public funds.
Until the start of 2014, the non-profit Public Bike System Company was responsible for operating Bixi. But the company quickly found itself in financial difficulties. In June 2011, Montreal extended a loan and also guaranteed a line of credit for the company.
In spite of this support, the organization was placed under bankruptcy protection in 2014. After the international portion of Bixi was sold to a private entrepreneur, Montreal taxpayers’ net outlay for this first phase was around $34 million.
Since then, it is the non-profit Bixi Montreal that has run the bike-sharing system.
In its financial statements, the organization recorded a surplus of over $800,000 in 2014, but in reality, its operations were still not profitable. Indeed, without the city’s support, it would have registered a $3.7-million deficit.
Spending did not stop there for Montrealers. In 2015, the city agreed to provide funding for the organization of $2.9 million a year through to 2019, with the organization allowed to keep all of its revenues — including the amount paid by the city.
The non-profit’s 2015 financial statements again show a surplus, and again, without the city’s contribution, this surplus would have been a deficit, of around $3 million.
Its 2016 financial statements are not yet available, but there’s no reason to believe the financial picture will be markedly different.
To the approximately $34 million in public funds that were sunk into the Public Bike System Company starting in 2011, you must add, at a minimum, a $4-million subsidy paid out in 2014, and $2.9 million a year for the period from 2015 to 2019 — or $14.5 million over the five years.
Montreal has also recently announced that it will spend $9.4 million over the next three years on Bixi equipment improvements — including 1,000 new bicycles, 80 docking stations and updated technology at pay terminals to allow payment by OPUS cards as well as contactless payments by smartphone.
When Bixi celebrates its 10th anniversary in 2019, the whole enterprise will have cost Montrealers over $60 million — on top of the fees paid by actual users each season.
A bike-riding capital?
It is often said that Montreal is the cycling capital of Canada, and even of North America, but the reality is more nuanced.
According to a recent Pembina Institute study, it’s true that Montreal ranks first among five large Canadian cities in terms of the number of daily cycling trips and the number of separated cycling lanes.
Taking population size into account, however, Montreal ranks fourth out of five in terms of cycling infrastructure.
Furthermore, if the goal of launching Bixi was to increase the frequent use of bicycles among Montrealers, this has not occurred. On the contrary, the number of “regular” cyclists — those who ride at least once a week — fell by a little over 24,000 between 2010 and 2015, a drop of around eight per cent.
What’s more, Bixi’s impact on the environment is probably negligible, since it seems to essentially replace walking, other cycling or public transit use.
Today, we may well wonder if spending $60 million over 10 years to maintain a public service basically limited to central neighbourhoods was the best solution for promoting active transportation.
There’s no telling what kinds of solutions would have emerged, as has happened in the case of car sharing, if not for public intervention pushing a one-size-fits-all model.
What was initially presented as a service that would pay for itself, and even be profitable, has become one more recurring burden on taxpayers.
Jasmin Guénette and Bradley Doucet are, respectively, vice president and public policy analyst at the MEI, and authors of "Viewpoint – How Much Has Bixi Cost Montrealers?" The views reflected in this op-ed are their own.