Unlike buses, light rail, and highways, bike share systems are not always understood as a public good. And in this modern era, in which public goods in some jurisdictions are expected to operate at a profit or else get cut, making the case for bike-share-as-public-good becomes harder. This is true of Toronto’s bike share system.
Bixi Toronto has been at the pillory recently for defaulting on a debt obligation. The City of Toronto backed a $4.5 million loan to get a bike share program launched in 2011. Bixi has repaid $600,000 of it so far, and Bixi does cover operational costs with revenue gained solely though memberships and user fees. But now the city is liable for $3.9 million of the debt that Bixi hasn’t been able to pay.
Should the city buy the program? Find a new contractor? Pay off the debt? Build out the system? Or sell the assets?
Since public money is involved, commentators, politicians and ordinary citizens are taking sides on this issue. And something is happening to Toronto’s bike share program that hasn’t yet happened elsewhere in North America. At about two years old, Bixi Toronto is young. But people are fighting for their bike share system to stay.
Toronto councillor, Kristyn Wong-Tam, has proposed an incentive for property developers to put in bike share stations on their property by reducing the number of parking stalls they would be required to install, saving them $50,000-$70,000 per stall. This would expand the bike share network, generating more revenue that may help Bixi Toronto pay off its debt.
Advocacy group Cycle Toronto and their allies are pushing the city to expand the system to bring in more revenue that should allow Bixi Toronto to meet its debt obligation. And even city staff have formally recommended to Toronto Mayor Rob Ford that the city buy up Bixi and pay off its debt.
Bixi Toronto is not the first public transit system, nor even the first bike share program, where a municipality would be expected to fund start-up and operational costs. But Mayor Ford has adamantly resisted any suggestion that the city should mount the debt. One option on the table for the city is to take control of the company and sell the equipment worth up to $1.2 million, according to a staff report gained by the Toronto Star Newspaper. Given that Bixi Toronto still owes $3.9 million, the city would still be indebted at least $2.7 million and have no bike share system to show for it were they to choose the sell-off option.
Operating at a financial loss and public gain happens all the time in public transit. But bicycles-as-public-transit is a new idea for a lot of people. And new ideas can be uncomfortable. Bixi Toronto knows this well.