BIXI Quebec Already Lays Off Employees

Update: see posts May 4, 2011 Bixi Charges $17 More in Toronto and Gives 15 Minutes Less Free Time than Montreal, May 3, 2011 Bixi Launch in Toronto, May 2, 2011 Bixi,  April 30, 2011 Bixi – Toronto (Arriving Soon)

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Bixi has already borrowed $4.8 million from the City of Toronto. If they don't receive another loan, will they begin to lay-off employees in Toronto?

If the City of Toronto doesn’t provide another loan to Bixi (Toronto has already provided a 4.8 million dollar loan and assistance in securing  80 Bike station spaces), will they start laying off employees in Toronto?

Bixi is already charging Torontonians $17 more ($95) a year for a membership than cyclists in Montreal (who pay $78 a year).  In Montreal, Bixi allows their bike riders to ride for 45 minutes for free (in Toronto, Bixi only allows 30 minutes for free).

Is this merely a sign of things to come?

Three weeks after launching its 2011 season, in Montreal, the company behind Bixi has laid off nine employees due to financial problems.

The private, non-profit Public Bike System Co. normally employs about 60 people at this time of year.

The company blamed its troubles on the provincial government.

Quebec has yet to approve a deal under which the city of Montreal would guarantee up to $104 million in loans and credit lines for the bike-sharing service.

The PBSC had already said it has suspended payments on its loan of more than $30 million until it secures the city guarantees.

A PBSC spokesperson did not return my interview requests on Friday but confirmed the layoffs to the TVA network. The affected employees work in marketing, operations, accounting and customer service.

(UPDATE: Spokesperson Michel Philibert just called me back to confirm the layoffs. He says they’re “temporary.” The PBSC is confident the province will approve the changes, he said.  He said the layoffs will not affect the Bixi service in any way.)

Montreal’s executive committee approved a deal in December under which the PBSC would be split off and become an autonomous company. Because the new structure involves Montreal guaranteeing the PBSC’s loans and credit lines, the deal requires the approval of Quebec’s Municipal Affairs Department. That assent has not come.

Municipal Affairs Minister Laurent Lessard’s spokesperson did not return calls.

In August 2010, city auditor general Jacques Bergeron said he was investigating the PBSC, concerned its debt will affect the city’s bottom line.

Bergeron is expected to unveil his findings when he publishes his annual report on May 16.

The company has said its Montreal operations posted a deficit of about $7 million last year, though it managed to post a $1.5-million operating profit, thanks to international sales.

Bixi has been exported to several cities, including London, Melbourne and Toronto. Boston is set to launch a Bixi service in July.

In December, PBSC chairman Roger Plamondon told me the company needs loan guarantees to help reduce its interest rate and to give it “an additional boost of creddibiltiy on the international scene.”

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