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Puget Sound Bike Share aiming for summer launch despite supplier bankruptcy

Image from Bixi
Image from Bixi

News broke Monday that the Canadian public bike maker PBSC (AKA Bixi) has declared bankruptcy. The company supplies the equipment and bikes used in most of the biggest US and Canadian bike share systems, including systems in New York City, Chicago and Washington DC.

They are also the supplier Puget Sound Bike Share was planning to use for the launch of the Seattle-based system this summer. So does this mean bike share in Seattle is in jeopardy?

“This [bankruptcy] is not necessarily a huge surprise to anybody,” said Puget Sound Bike Share Director Holly Houser. In fact, Houser said that it could help move the company forward after years of uncertainty have plagued PBSC, which has significant financial backing from the City of Montreal. We reported previously that Puget Sound Bike Share was aware of financial struggles at PBSC and were making efforts to shield itself from any impending troubles.

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Houser also said that, as of now, Alta Bicycle Share (the chosen operator for the Seattle system) and PBSC (the supplier Alta contracts for bikes, docking stations and other equipment) expect to be able to deliver on planned bike share expansions scheduled this year in Vancouver, Seattle and Portland.

Houser also said that Puget Sound Bike Share has not yet signed anything obligating it to use PBSC equipment, though she is still hoping to do so.

“PBSC’s equipment is fantastic,” she said. “It’s the best out there at the moment.”

Most early analysis of the bankruptcy suggests that it shouldn’t prove to be a huge impediment to the magnificent growth of bike sharing around the nation and the globe in recent years. But it might be a sign that seeing bike share systems as profitable business ventures may not always work.

“I don’t see this as being a very big bump in the road for bike share,” Portland author Elly Blue told NPR. “I just see this as a chance for cities to learn — we can’t run our transportation systems like a business, it doesn’t really work that way because then we run the risk of not serving the people that need to be served.”

PBSC is a somewhat complicated business because it is both an international equipment supplier and a bike share operator of the Bixi bike share systems in several Canadian cities. The City of Montreal loaned the company millions, and is a major creditor as PBSC starts the bankruptcy process. As you might imagine, PBSC’s financial situation is a bit of a scandal there.

While bike sharing systems have proven to be immensely strong marketing opportunities for sponsors and several bike share systems have been able to cover operating costs using user fees (an impressive feat for any transportation system), they have not pulled huge profits for their operators and may find it hard even to fully recover the costs of launching.

The best financial model for bike share systems is still being figured out. The City of Vancouver, for example, has pledged $7 million to start a system there. But Puget Sound Bike Share’s business model is based on a combination of grant funding and private sponsorships for start-up costs.

That, of course, doesn’t mean the City of Seattle and King County have no role in bike share here. Indeed, both are partners in the project, and ordinance changes and fundraising support from the government are vital. In fact, Mayor Ed Murray has made it a goal to help launch Puget Sound Bike Share this year.

“Ed Murray is getting involved personally and reaching out to potential sponsors,” said Houser. “That’s been really helpful.”

From a bike share business plan. Actual roll-out may be a little different
From a bike share business plan. Actual roll-out may be a little different

Houser cannot speak publicly about the ongoing sponsor search process, but she said things are going well. The system has already secured grants to launch in the University District and South Lake Union. Seattle Children’s has pitched in the money needed to cover the helmet vending costs, which added to the system’s price tag due to King County’s all-ages helmet law (Vancouver is also dealing with this issue due to British Columbia’s helmet law). The remaining sponsors are needed to launch the downtown and Capitol Hill sections of phase 1 (roughly noted as Phase 1A in the map above).

If the system is going to launch in August, as is now the plan, the needed sponsorships would have to be mostly figured out by mid-February so a purchase order can be made. The name and branding of the system would need to be figured out shortly after that, which means time is running out for a single organization to step up and buy naming rights to the system (seriously, it’s a great deal).

If no single sponsor steps up, Puget Sound Bike Share will develop a unique branding scheme, and a set of sponsors will have a display ad presence on the system (this is also a great deal). And no, it will likely not be named “Puget Sound Bike Share.”

The group has not officially launched the branding process yet, but they have created an online survey to gather input from potential users of the system about how they see themselves using the system.

Take the survey here.

Have an ideas for non-corporate names for the system? Post them in the comments below.

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9 responses to “Puget Sound Bike Share aiming for summer launch despite supplier bankruptcy”

  1. Gary

    Launching in August is two months shy of this system succeeding. They need to launch in June so that tourists can use it in late June,July and August. By August… it could easily be mid August to late August. People will look at any sort of membership fee and say? pay this for a month of riding? (Mid August to Mid September) No thanks.

    It won’t be an unmidigated disaster but it is a terrible time schedule.

  2. Matthew Snyder

    I like bike share. I use it in other cities when I can, and I get bummed when I visit a city that doesn’t have it. I hope it succeeds here.

    But PSBS is just asking for way too much money from a potential sponsor. I just don’t see how you can call this a great deal. A “great deal” is what New Balance got in Boston, paying $600,000 for the naming rights to the New Balance Hubway bike share system. But PSBS sponsorship is in a different ballpark. $7.5 million to stick your brand on a relatively modest bike share system with supplier troubles before it even launches? In my mind, that’s a risky investment.

    Yes, Citi paid $41 million for Citibikes in NYC, so it’s not unprecedented. But keep in mind, that was 10,000 bikes and 600 stations. PSBS is proposing something an order of magnitude smaller than that.

  3. sgg

    So why did they decide on this supplier if this comes as a surprise to no one? Amazing.

    I have used bike share in other cities and have found it to be an awesome transportation choice as a visitor. Seattle never misses an opportunity to do it wrong though. Wait until it’s ready to launch and for god’s sake include the south end of town. This proposal looks like something cooked up to only serve UW students.

  4. Just a Guy

    I disagree that August is the wrong time to launch this service. Our best weather is right there – any earlier than mid-July, and we risk a rainy day launch. No thanks. Our best weather has nothing to do with June. Ever.

    1. Gary

      Launch day/week nearly always has problems undiscovered during testing. Tourist are not your best testers. They go home before the fixes are done, and complain. You should launch before your expected maximum usage not in the middle of the most critical month.

  5. […] has insisted that all their bikeshare programs will continue to operate, and systems in Portland, Seattle, and Vancouver, BC, will open as planned. They have not said whether they still intend to use the […]

  6. RossB

    Ideally, a bikeshare system should be huge. It should cover the entire city. Otherwise, it is like a phone system that only serves a handful of locations — there just isn’t that much value in it.

    But if this only serves a handful of locations, then it should focus on the areas that make sense to serve. For this city, that is the Burke Gilman. In a couple years, the fastest way to get from Fremont to Capitol Hill will be bike and train. This will involve a fast bike ride followed by a brief wait and a very fast train trip. If you do the math, you realize that even a slow poke can bike and ride that section faster than a car, let alone a bus/train combination. Furthermore, the Burke Gilman is one of the few areas in the city that is appealing for casual bike riders and thus these types of bikes (which are slow). You don’t have to worry about (car) traffic, nor steep hills, which are two big detriments to usual bike riding. If you pace yourself, you don’t need to take a shower when you get to work (you will be less sweaty than some of your co-workers who just survived rush hour traffic).

    Place stations all along the Burke, but especially at the train station, and other connection points. Not only Fremont and Ballard, but also spots like 15th NE, which is where several buses connect. Until the light rail goes north, that will be the fastest way to get from various north end locations to Capitol Hill , downtown or places south (e. g. Roosevelt to 15th on a bus, then a short bike ride, then take the train south). Put a bunch of bikes close to Ravenna and you can serve that area quite nicely. Like I said, this wouldn’t be ideal, but if you have limited funds, it would be a very good start. It makes way more sense than putting bikes downtown, where most people (myself included) would never consider using them (going east/west is way to steep and I can just hop on a bus/train if I’m going north/south).

    Oh, and I’m with Gary. June can be wet, but the days are long and it is only a month before July, and two months before August. If you start in August, you have at best a month to iron out all the kinks before the rains roll in.

  7. […] We reported previously on troubles at Bixi, the Montreal-based company that supplies the bikes and docks Puget Sound Bike Share had hoped to use. Portland, Vancouver BC and Seattle were all slated to launch systems in 2014, but the supplier troubles have caused uncertainty and likely delays. […]

  8. […] the not-entirely-surprising bankruptcy of former Alta supplier PBSC (AKA Bixi) earlier this year, the chances of keeping a 2014 launch […]

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