MONTREAL | The addition of many electric bikes to the fleet of BIXI will result in an increase in the operating costs of the service, which will be borne by the taxpayers of montreal.
In 2019, the City had signed an agreement with the organization BIXI Montreal, providing an envelope of $ 46 million over ten years.
The amount allocated each year may vary according to needs. For 2020, it is approximately $ 4.2 million which will be paid to the organization (before taxes), rather than the $ 3.8 million projected, since 1000 electric bikes additional are added to the fleet.
It seems, therefore, that in the long term, the money provided is not enough. “Since the addition provided for other similar facilities in 2021 and 2022 will also have an impact on the financial contribution estimated of the City in the coming years, changes to the management agreement are already considered and will be submitted shortly to the decision-making bodies for approval”, can we read in a decision summary approved by the City.
“It is premature to estimate what will be the financial contribution of the City of Montreal over the next few years,” explained a spokesperson for the City of Montreal, Marilyne Laroche Corbeil. The latter underlines that the system of bicycle in self-service is expanding each year, resulting in additional costs of maintenance and management that have an impact on the financial contribution that the City pays to BIXI.
On the side of BIXI, it was mentioned that the original agreement with the City of Montreal was based on a fleet of bicycles standard. “The additional sums are necessary because of higher production costs for an electric fleet vs a fleet of bicycles standards”, explained the spokesman of BIXI Montreal, Bérengère Thériault.
With declining revenues
In addition, the pandemic has had an impact on the finances of BIXI Montreal, which provides for financial losses of the order of $ 2.2 million for the year 2020, despite a reduction in expenses of 14%.
The total revenue entered in the budget 2020 are $ 9.6 million, a decrease of 31 % compared to those who were included in the budget 2019. “This decrease is explained, among other things, by income from subscriptions and use of the 57% decline in”, one can read in the document presented to the executive committee of the City of Montreal at the beginning of the month.
The sponsorship revenues have fallen by 71 %, from $ 2.4 million in 2019 to $ 700,000 in 2020.
It is the City of Montreal will be required to fill the operating deficit of BIXI from 2021 onwards, in accordance with the management agreement in force.