Vancouver's bike share program will be delayed by several months because of reported financial problems with Montreal-based bike share company Bixi.
"We're still in negotiations, and we've given city staff very specific instructions on not taking a risk," said Vision Vancouver councillor Heather Deal, who has spearheaded the bike share program.
Deal said the program should roll out at the end of 2014, instead of early 2014 as planned.
But NPA councillor George Affleck is questioning whether any public funds should be committed to the "risky business" of a for-profit bike share program.
"I've asked council: 'Can you give me an example anywhere in the world where bikesharing is making money or is profitable or is a successful business?' and there is no example," Affleck said.
Several news outlets reported today that Montreal-based bike share company Bixi faces insolvency. The Toronto Star and the Province received internal City of Toronto documents that said Bixi is "insolvent or imminently insolvent." The auditor general of Montreal has also warned that Bixi's financial state is precarious.
According to the documents, Toronto is owed $3.7 million out of a $4.5 million loan intended to help the program get up and running.
In July, Vancouver's city council voted to spend $6 million to start a bike share system here, and to spend $500,000 every year to support the program. Vancouver planned to contract Alta Bicycle Share, a Portland company, to operate the system and Bixi to provide the equipment.
British Columbia's mandatory bike helmet law presented a challenge to the program, so Vancouver's plan also includes a helmet vending machine system.
Deal said Vancouver's program will not include a loan, like Toronto provided, and is therefore less risky. Instead, the $6 million will be an "up-front capital investment."
"Profit is not the primary driver," Deal said.
Affleck said he supports the concept of bike share programs, but the for-profit model needs a rethink: if the system isn't profitable, it should be presented as part of the public transit system.
"If this is a government-funded transit system, then TransLink should be involved, and they should be investing the research and development in the neighbourhoods that could benefit," he said.
Affleck also questioned whether the funds the city has spent already on research and staff time for a for-profit bike share program, which he pegs at at least $50,000, has been money well-spent.
Bike share programs have been a big success in other North American cities like Chicago and New York, said Brent Toderian, former chief planner for the City of Vancouver.
But expecting the programs to be profitable muddies the political waters unnecessarily. Instead, bike shares should be seen as a low-cost way to move people around the city, Toderian said, and therefore are a good investment for cities.
"Bike share, and bike infrastructure in general, is one of the most cost-effective ways cities can facilitate people moving around the city," he said. "The most expensive way by far is to build infrastructure for cars."
B.C.'s bike helmet laws also present a big roadblock to the success of Vancouver's program, Toderian said, with the potential to erode ridership and cause political controversy over where the helmet vending stations are placed.
He believes the city should be more active in lobbying the province to change the law if they want the bike share program to succeed.
