# BIXI - viable business model?



## Four Pillars (Apr 5, 2009)

A new bike rental service called BIXI opened up recently in Toronto serving the downtown core. It also exists in Montreal.

I think it's a neat idea, but I can't for the life of me think of who will use it.

Regular riders (like myself and MoneyGal) have our own bikes.

Tourists? Maybe - as long as they don't have too much to carry.

Shoppers? No - too hard to ride a bike with shopping bags.

Anyone else? Keep in mind that there are a ton of transit and taxi opportunities available in the downtown area.

Has anyone here used it? 

Note - I'm curious about this and I'm also planning to write an article about it on my blog.

Here's a Toronto Star article on it: http://www.thestar.com/news/article/987207--one-bixi-bike-ride-does-not-a-believer-make


----------



## brad (May 22, 2009)

Bixi was started here in Montreal a couple of years ago and I had the exact same reaction as you -- and boy was I wrong!

Despite the fact that Montreal has one of the the highest levels of bike ownership per capita in North America, Bixi has been an incredible success here. When you go downtown you see Bixis everywhere -- some of them are tourists, of course, but a lot of them are locals, including many hundreds of commuters in suits.

Bixi is a combination of the terms "bicycle" and "taxi," and it's really meant to replace short trips that you might otherwise take by taxi. I don't know how many people really use it as a taxi replacement; I think it's just a convenient form of transportation.

The network here in Montreal is great, there are smartphone apps that let you see how many bikes are available at each station in your vicinity (and the stations themselves will give you that information), the bikes are easy to use, and the system just works.

I got a great deal on my Bixi subscription this year by combining it with an annual subscription to the Metro and bus system, which I would have bought anyway; it allows me to get a year of Bixi use for $17 instead of the usual $78 or whatever it is now. I get a smart tag that I use to take out a Bixi bike whenever I need it. I've only used it a couple of times, but it's great for nights out on town when I don't want to ride my own bike all the way home (I'm about an hour from downtown by bike, bus, or Metro). Instead, I take the Metro and then Bixi to wherever I'm going, and Bixi back to the Metro.

The other thing to note is that some people have gotten rid of their bikes once the Bixi system was established, because many people have no room in their apartments for a bike and if they leave it locked out on the street it's likely to get stolen or vandalized. Bixi avoids all that -- there have been a few cases of vandalism but a lot less than you might expect.


----------



## MoneyGal (Apr 24, 2009)

I am not in the target market, so I'm a little confused, too. 

There is a pretty decent discussion on Reddit about the Toronto launch, specifically about the coverage area, here: 

http://www.reddit.com/r/toronto/comments/g4jdi/bixi_its_hard_for_me_to_see_how_this_wont_fail/

Here is a very cool interactive map of Toronto useage: 

http://oobrien.com/vis/bikes/?city=toronto

We're pretty hooked into the bike world in my household. My spouse is a CanBike instructor and spends a lot of time volunteering in the bike world.


----------



## Four Pillars (Apr 5, 2009)

@Brad - thanks for relating your experiences. I've had a few bikes stolen so I know what that is all about.

Thanks MG. That reddit thread is good.

So, a few more reasons:

Commuters who live in a small apartment might find renting easier than storing a bike in a small space and bring the bike into an elevator.

People commuting from Union station (Go station) might want to ride instead of subway to the office.


----------



## brad (May 22, 2009)

It may take a while to get off the ground in Toronto, since it seems like a very tentative start: 80 stations versus the 400 stations (and 5,000 bikes) we have in Montréal (with more added every year). 

I honestly was VERY skeptical of Bixi when it launched here and was sure it would be a flop. I was amazed to see how it has taken off, and now that I've tried it myself I'm hooked. For me it's perfect for "cocktail transport" multi-modal transportation -- bus to Métro, Bixi to wherever I'm going (there are Bixi stands near all the Métro stations downtown), Bixi back to Métro, back home. I use my own bike for grocery shopping and similar errands, but Bixi really comes in handy on evenings downtown -- the ride back home goes through some pretty shady areas where I'm not too keen on riding in the middle of the night, so I prefer to take the Métro.

I can't overemphasize how successful Bixi has been here, despite everyone's predictions. There were over 1 million rentals the first season alone.


----------



## FrugalTrader (Oct 13, 2008)

Never heard of this company until now. A quick search from wiki shows that they had $33M in revenues with $7M net income in 2010. Much higher than I expected!
http://en.wikipedia.org/wiki/Bixi


----------



## Addy (Mar 12, 2010)

We took a trip to Montreal a few years ago specifically to check the BIXI system out. It was amazing! I love it and can't wait to move to Ontario and take part in it when we visit TO more often. It's amazing to see how popular the service is - the racks are portable, due in part to the BIXI program being such a success that they run low on bikes in some locations and have to move racks around. Incredible program!


----------



## brad (May 22, 2009)

Addy said:


> the racks are portable, due in part to the BIXI program being such a success that they run low on bikes in some locations and have to move racks around. Incredible program!


Actually I don't think they move the racks very often, they mostly move bikes from areas where the racks are full to areas where they're empty. The whole system is computerized, and if too many racks in a particular area are empty they'll go and round up some bikes from areas with full racks and distribute them. You can see at a glance (on the Bixi website, a smartphone, or any Bixi station) how many bikes are available at any station, and how many empty spaces are available. 

If you get to the station where you want to leave your bike and it's full, you can get a few extra free minutes to go to the next-nearest station with spaces available. You can ride for 45 minutes at a time without incurring any fees if you're a member ($78/year), but if you want to ride longer you can just hop from station to station taking out a new Bixi each time.

The whole system is well thought out, which in part accounts for its popularity.


----------



## the-royal-mail (Dec 11, 2009)

How is this funded? Where does the money come from?


----------



## brad (May 22, 2009)

the-royal-mail said:


> How is this funded? Where does the money come from?


Bixi is a private non-profit although I remember reading that management of the Montreal Bixi system was taken over by the city of Montreal last year. The city provided a big loan to get it started ($31 million) but they've got a bunch of corporate sponsors; there have been so many users that the initial investment in all the equipment and system is projected to be paid off in less than three years. They had 30,000 members in 2010, 3 million trips, $1 million in profits, loan repayments beginning three years ahead of schedule.


----------



## Addy (Mar 12, 2010)

brad said:


> Actually I don't think they move the racks very often, they mostly move bikes from areas where the racks are full to areas where they're empty.


That makes sense. We were in Montreal a few months after the Bixi system was introduced, and we saw the racks moving fairly often. It sounds like they worked the kinks out. I know they do move racks around according to demand (ie a big concert etc) but that is probably a result of learning where the demands are. I know I was, still am, thoroughly impressed with Bixi.


----------



## Jungle (Feb 17, 2010)

The one year membership in Toronto is $95.00. So a little higher than Montreal. The bikes are aluminum with a three speed auto hub shifter. The seat is adjustable too. There is a small basket on the front of the bike. 

The only problem I see, is what if you do not have a bike lock with you at all times? 

I did not see them come with any bike locks.


----------



## Xoron (Jun 22, 2010)

Jungle said:


> The only problem I see, is what if you do not have a bike lock with you at all times?
> 
> I did not see them come with any bike locks.


Jungle,

I think the idea is you would just check the bike back into the closest Bixi Bike Stand and go about your business. Then go check one back out for the return trip. No bike locks needed.

But you need to bring your own helmet


----------



## Four Pillars (Apr 5, 2009)

Here's my article on Bixi. It contains exactly nothing that isn't covered in this thread. 

http://www.moneysmartsblog.com/bixi-bike-rental-will-it-succeed/


----------



## Dmoney (Apr 28, 2011)

Similar system in Paris where I lived for a stretch. Was 29 Euros for a year membership, and that entitled you to the first 30 minutes (maybe an hour can't recall) of every trip free, and was still very cheap after that. So you'd go for 25 minutes, park it in a station, and take another one out. Never pay a cent over the yearly fee.

I used it for absolutely everything. Going to school, going to the grocery store, going to the bar, getting home from the bar, visiting friends, you name it, there was no cheaper and more convenient way of getting around. The bikes there came with locks, but there were so many stations that you just dropped it off and picked up a new one. 

Only problem I found was a huge amount of vandalism. Can't see it being profitable with the number of bikes needing to be replaced because of damage. Not sure how it is in Montreal, but in Paris they got smashed up pretty badly.


----------



## brad (May 22, 2009)

Dmoney said:


> Not sure how it is in Montreal, but in Paris they got smashed up pretty badly.


There has definitely been vandalism of Bixis in Montreal, but most of it occurred during the first season; it has fallen off dramatically since then.


----------



## humble_pie (Jun 7, 2009)

big bixi finance boo-boo building up in montreal.

suddenly a $108 million deficit has appeared & bixi desperately needs huge emergency cash infusion to keep going. 

they're saying bixi bikes cost $6,000 each ...


----------



## brad (May 22, 2009)

Yes, I saw the articles in the papers on Friday and over the weekend, it's all very confusing. On the one hand the story seems to be that Bixi is a victim of its own success and has had to spend way more than expected to meet all the demand plus its expansion into new markets; on the other hand it seems like Bixi's management has been less than truthful on many matters. It'll be interesting to see how it all shakes out.

Another note on vandalism: this year for the first time the Bixi bikes are carrying advertising, and a lot of people aren't happy about it; the advertising has been defaced and altered on a lot of the bikes.


----------



## m3s (Apr 3, 2010)

Dmoney said:


> Similar system in Paris where I lived for a stretch. Was 29 Euros for a year membership, and that entitled you to the first 30 minutes (maybe an hour can't recall) of every trip free, and was still very cheap after that. So you'd go for 25 minutes, park it in a station, and take another one out. Never pay a cent over the yearly fee.


I watched a TV special on BIXI a long time ago and I'm pretty sure it was based off of Paris if not other systems in Europe for sure

Biking is amazing in Europe but the roads are designed with bikes in mind and the weather is acceptable most of the year. In Canada, the only bikers I see are athletic sweaty spandex wearers dodging traffic. Here, you see just about anyone (suits, seniors etc) casually biking around. I prefer it now to getting into a sauna and having to find parking, or putting on all my motorbike gear for a 5 min ride


----------



## humble_pie (Jun 7, 2009)

i'd say the bixi spin doctors are not confused at all.

my money says they knew this was coming so they whomped up max feel-good PR first to cushion the blow.


----------



## Ziggy (May 16, 2011)

IMHO there is a municipal power struggle going on behind the scenes over who gets to profit from the Bixi that isn't being reported. Given the delay in the release of the report on the Bixi we won't find out the full details till well after the deal goes down.

I can give a rough time line based on what I remember from when Bixi did a presentation last year to Montreal Board of Trade Members in addition to other information that is available on the net.

In 2006 or 2007, the City of Montreal gave the company Stationnement de Montreal the mandate to set up a public bike sharing system. Stationnement de Montreal chose implement this by setting up a nonprofit private company call Public Bike System Co. and loaning it approximately 33 million dollars at I believe 7% interest.

As a result of this loan, in 2009, Stationnement de Montreal was unable to pay in full the 42.5 million dollars it owed the City of Montreal for revenues generated by running parking in Montreal. Stationnement de Montreal have stated that they intend to repay the amount owed plus interested.

Stationnement de Montreal and the City of Montreal have been at odds in the past about how much Stationnement de Montreal should pay them. So when Bixi became a success and City of Montreal stood to gain none of the profits due to the way Stationnement de Montreal set the Public Bike System Co. they started raising a fuss by doing the audit etc in 2010 even though Public Bike System Co. is ahead of schedule for repaying its loan to Stationnement de Montreal.

The City of Montreal plans to loan Public Bike System Co. 37 million dollars at 2% interest to cover the loan from Stationnement de Montreal so that Stationnement de Montreal can intern pay the City of Montreal the amount it owes on parking revenues. The City of Montreal wants Stationnement de Montreal out of the picture so that the City of Montreal can get a larger share of the profits.

I speculate that what is going on is that the City of Montreal has reached a deal with Stationnement de Montreal to take over financing of Public Bike System Co. However, the City of Montreal was dragging its feet in terms of getting its side of the financing ready. So when Stationnement de Montreal loan was due there was no money available. Keep in mind that if the City of Montreal did not decided to meddle with the Bixi program, Stationnement de Montreal probably would have continues financing Public Bike System Co. as planned in their presentation last year.


----------



## brad (May 22, 2009)

This editorial in today's Gazette seems to sum it up pretty well:

http://www.montrealgazette.com/news/Bixi+didn+steer+well+path+success/4788262/story.html


----------



## Ziggy (May 16, 2011)

This Gazette post has some interesting supporting documentation.

http://blogs.montrealgazette.com/2011/05/17/bixi-by-the-numbers/

Bixi has also made a public statement

https://montreal.bixi.com/about-bixi/news/2011/05/18/bixi-establishing-the-facts


----------

