Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Bike Sharing Company Files for Bankruptcy
Author: Joel R. Glucksman
Date: January 31, 2014
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It is hard to get around in many metropolitan areas, and many cities across the country have therefore implemented bike-sharing programs in recent years. However, proving the adage that “what goes around comes around,” the company that provides the major number of those bikes recently files for bankruptcy protection under Canadian bankruptcy law.
Public Bike System Co., which owns BIXI bike-sharing system, filed in bankruptcy court citing nearly $50 million in debt, according to NPR. Bikes and technology from this company are used in 16 areas around the world, including Chicago, New York, London, Montreal, and Washington, D.C.
Elly Blue, author of Bikenomics, told NPR this bankruptcy filing probably won’t impact bike-sharing programs.
“I don’t see this as being a very big bump in the road for bike share,” Blue said. “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.”
Chicago is one of the biggest consumers for this program, with Public Bike System Co. providing more than 3,000 bicycles, 300 docking stations and computer software used to collect fees and keep track of bikes, according to the Chicago Tribune.
A city official told the Tribune that Chicago’s program should continue as normal, as many companies are able to operate under bankruptcy. If necessary, the official said the city would just have to find a new supplier.
Public Bike System Co.’s bankruptcy isn’t a surprise to many, as the business has had issues in recent years. For example, delays with new technology had led some customers to withhold payments, which could have contributed to the company’s inability to repay its $108 million loan and loan guarantee package from the city of Montreal.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
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