The Montreal-based company that supplies Minneapolis’ bike-sharing system announced Monday it plans to file for bankruptcy, but that’s unlikely to keep Nice Ride bikes off the streets this spring.
Nice Ride Minnesota Executive Director Bill Dosset said Tuesday the bankruptcy “won’t affect the operation of our basic system at all.”
What’s not yet known is whether it will delay delivery of 150 new bikes and 17 docking stations Nice Ride has on order for the spring.
“We’ve been told by folks up in Montreal by the folks who are working on this that both the reason for the bankruptcy and the timing of bankruptcy is to get that manufacturing supply going again,” Dosset said.
Public Bike System Co. (PBSC) operates Montreal’s bike-sharing system under the brand name Bixi and also supplies bikes and docking stations to Nice Ride and its counterparts in New York City, Chicago and more than a dozen other cities. PBSC is reportedly more than $40 million in debt and embroiled in a legal dispute with 8D technologies, a former subcontractor that was the initial software developer for the company.
Multiple reports indicate PBSC owes more than $31 million on a $37-million loan from the city of Montreal. Bixi spokesperson Fabrice Giguere said both sides were planning to meet soon to discuss their options, although Giguere declined to describe those options in detail.
“As of today, our doors are still open, and as of today it’s still business as usual,” Giguere said Jan. 22. “In the days to come representatives from PBSC and the city of Montreal are going to sit down together and talk about the different scenarios that are on the table for the future of PBSC.”
In April of 2012, 8D Technologies, also based in Montreal, filed a $26-million lawsuit against PBSC in the Superior Court of Quebec. In a statement on its website, 8D claimed PBSC made the “gratuitous and unilateral decision” to replace 8D’s software with its own software developed in-house.
But that software had problems. When Citi Bike launched last spring in New York City, there were widespread reports of bugs. Complaints also surfaced in Chicago and San Francisco, Dosset said.
“That’s really what this whole bankruptcy is about,” he said.
Nice Ride still operates using an 8D-supplied software platform.
“That system is working great, and most importantly we have a separate contract with 8D, so this bankruptcy won’t effect the operation of our basic system at all,” Dosset said. “In fact, 8D has recently come out with some real terrific improvements to their system that will be part of some upgrades.”
Despite the software differences, all of the bike-sharing systems operate using the same hardware, and the notice to file bankruptcy has raised concerns PBSC may not be able to fill orders this spring.
Dosset said it’s his understanding one goal of the bankruptcy is to reassure the hardware suppliers in PBSC’s manufacturing chain that they will indeed get paid. The bankruptcy may ultimately result in PBSC’s bike-sharing operations through Bixi being separated from its manufacturing operations, he said.
Dosset said he last spoke with PBSC on Monday, before the company announced its intention to file for bankruptcy.
In its 2013 annual report, Nice Ride noted it had filed a “notice of material breach” of its agreement with PBSC.