Bixi, the Canadian company that builds the bikes, docks, software and station that are used by Capital Bikeshare (as well as Divvy, Citibike and dozens of other cities) has filed for bankruptcy protection.
The Public Bike System Company’s decision to seek federal protection from creditors owed millions forced the city of Montreal to take over its local bike-sharing program to protect its investment.
The development was announced Monday by Montreal Mayor Denis Coderre.
“If Bixi can be saved, it’s through the Bankruptcy and Insolvency Act,” the Montreal mayor was quoted as saying.
The problem appears to be a failure to pay by some cities
The CBC quoted the troubled company as tying its cash-flow problems to the development of “new proprietary technology for international clients.”
The story further claimed that “persistent delays and problems with the technology” had prompted “many clients,” including Chicago, to withhold payments. Chicago and New York together owe Bixi $5.6 million, according to the CBC.
It's unclear how or how much this will effect CaBi. Bixi Toronto seems unconcerned. Just because the company has gone bankrupt, that doesn't mean CaBi won't be able to buy any more equipment. After all, you can still buy Twinkies and Corvettes.
BTW, the article on Toronot includes this interesting factoid on how the progam was paid for
Councillor Denzil Minnan-Wong avoided using taxpayer’s money to directly acquire Bixi, with a clever toilets-for-bicycles swap. City council let Astral Media, a division of Bell Media, off the hook on the company’s commitment to open 11 public toilets in Toronto in exchange for $5-million. The city used the cash to pay off Bixi’s debt to Toronto.