published Wednesday, January 22nd, 2014

Supplier for Bike Chattanooga declares bankruptcy

The primary supplier for Bike Chattanooga has declared bankruptcy, adding uncertainty to the program's problem-plagued launch.

The Public Bike System Co., known as Bixi, which provides the bikes and about 30 solar-powered bike rental kiosks throughout Chattanooga's downtown, owes $50 million to suppliers and creditors, including the taxpayers of Montreal.

Bixi also supplied shared bike programs in 15 other cities, including London, New York and Chicago. But some of those cities have withheld payments to the company, citing software problems, as has Alta Bicycle Share, which manages Bixi's equipment in Chattanooga on behalf of the city. Alta wants $11 million from Bixi due to software delays, Forbes reported.

Chattanooga spent $2 million to acquire 300 bikes and set up its program, but technical glitches and low ridership plagued the system in 2012 and 2013. As of March 13 2013, the program brought in just $113,951 against ongoing and administrative costs of more than $500,000.

Bixi said it will try continue operations to reorganize its finances or sell assets under Canadian bankruptcy laws.Despite the problems with its biggest supplier, Alta Bicycle Share assured Chattanooga and other municipalities in a news release that the program will continue without interuptions.

  • photo
    Chattanoogans Damon and Maria Henderson look at the rental bikes near the Sports Barn garage in this June 2013 photo.
    Photo by Staff File Photo.
    enlarge photo

"Our systems across the country -- in New York City, Chicago, Washington DC, Boston, the Bay Area, Columbus, Ohio, and Chattanooga, Tenn. -- are up and running, and ABS will ensure that they continue to operate without interruption," Altathe company said. "Having served more than 15 million trips to date, we're focused on continuing to provide a convenient, fast, fun, and affordable means of transit. Given our plans to expand current systems and launch new systems this year, we're in constant communication with both PBSC as well as its suppliers to ensure we can do so successfully."

The city splits any fees with Alta Bicycle Share, which takes 25 percent.

Blythe Bailey, Chattanooga's director of transportation, defended the program last month. In its first 14 months of operation, the Chattanooga Bicycle Transit system logged more than 40,000 trips with about 10,000 customers in the first 14 months, Bailey said.

"This is on par with other cities that have recently launched bike shares in similarly sized communities," he said.

Lacie Stone, director of communication for the city, said Alta Bicycle Share has assured city officials that Chattanooga's system would not be interupted during Bixi's bankruptcy.

Alta officials did not respond to questions about where replacement bikes and kiosks will come from if Bixi goes under.

Contact staff writer Ellis Smith at esmith@timesfreepress.com or 423-757-6315.

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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