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Glitchy Citi Bike Manufacturer Files For Bankruptcy Protection
By
Lauren Evans
Published Jan 21, 2014
Modified Jan 21, 2014
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By
Lauren Evans
Published Jan 21, 2014
Modified Jan 21, 2014
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New Yorkers are pedaling their Citi Bikes through the Polar Vortices, but they'd better hope the company behind the system remains as hardy as they are—Bixi, the Canadian company that developed much of Citi Bike's technology, has filed for bankruptcy protection.
According to CBCNews, the company began its descent into the financial doldrums when it tried to develop new proprietary technology for international customers. But persistent glitches (sound familiar?) drove clients to withhold payment—New York declined to hand over 3 million Canadian dollars, and Alta Bike Share, which operates Citi Bike, has also demanded $11 million in damages for software delays. In total, Bixi has found itself nearly $50 million in debt.
The city of Montreal has seized Bixi, to the dismay of taxpayers responsible for shouldering the ailing company's debt. Montreal's mayor, Denis Coderre, said Bixi erred when it attempted to expand internationally. Montreal "embarked on commercial operations that it should not have been involved in... It is not up to taxpayers to assume the financial risk involving a business plan," he said on Monday. In addition to its suppliers, Bixi also owes Montreal $31.6 million on a $37-million city loan, which the city has decided it would like now, please.
Monday's announcement offers some vindication for New Yorkers unwilling to accept that the summer's widespread glitches weren't merely "initial kinks," as the DOT aggressively insisted they were. For the past several years, Bixi has tussled with another company called 8D Technologies, which developed the software behind the bike share stations. As 8D's Isabelle Bettez told us in an interview several months ago, Bixi refused to offer an appropriate sum for the technology developed by 8D, and attempted instead to hastily recreate it in-house. She speculated at the time that perhaps Citi Bike's maladies were born of slipshod technology, and the city's refusal to pay up indicates that she was right.
But Bixi's problems are not necessarily Citi Bike's, at least not yet. In October, Alta Vice President Mia Birk told the Atlantic Cities that the program isn't going anywhere. "No matter what happens with [Bixi], Alta Bicycle Share will continue now and in the future to provide world-class products and services to our clients."
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alta bike share
bixi
citi bike
Lauren Evans
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