Divvy Bike Supplier Files For Bankruptcy
By Lisa White in News on Jan 21, 2014 4:00PM
We had a feeling Divvy was going so smoothly, a snag was bound to happen. The company that supplies bicycles, stations, docks and software for Divvy filed for bankruptcy Monday. The Sun-Times has the full story on how the Public Bike System (also known as Bixi) Company’s decision to seek federal protection from creditors forced the city of Montreal to take over their own local bike share program. The Montreal City Council bailed out Bixi three years ago, which included a loan to cover operating deficit and a loan that Bixi hoped to use to expand to other cities. On Monday, the city said they would seize control of the company’s local assets, rather than sink more money into it. Montreal Mayor Denis Coderre was quoted Monday as saying “If Bixie can be saved, it’s through the Bankruptcy and Insolvency Act.”
The Sun-Times also reports that “persistent delays and problems with the technology” had prompted “many clients” to withhold payments. Chicago and New York together owe Bixi $5.6 million. Divvy was expected to add an additional 75 stations in Chicago after Mayor Rahm Emanuel announced in November his plan to use $3 million in federal grants toward the expansion, but Monday’s bankruptcy news will leave all of this up in the air. Whether you are a fan of the blue bikes or not, we will all have to wait to see how the future of Divvy pans out here in Chicago.