TTC passes on opportunity to take over money-losing bike program

The TTC is right to deny City Hall’s request to take over the city’s struggling bike-sharing program, writes Brady Yauch.

The Toronto Transit Commission has refused a request from city hall to take over the city’s struggling bike-sharing program, saying it is not “financially sustainable” and would act as a “distraction” to the transit agency’s current operations.

The bike sharing program, called BIXI, has been a financial headache for the city since it first launched in 2011. The city initially backed the program by offering a loan guarantee to the tune of $4.5 million to BIXI Toronto. The program’s current outstanding debt stands at $3.9 million.

BIXI is, according to TTC officials, “experiencing financial difficulties”, as user fees and other sponsorships are unable to match the operating costs of the program.

Earlier this year, city officials investigated whether any private sector operators would takeover the BIXI program. None of the respondents to the proposal said it would be viable without a subsidy from the city.

That led officials to turn its attention to the TTC, a favourite stop when it comes to dumping political pet projects, and whether it would be interested in taking on BIXI. The TTC’s report to the city on Wednesday was a resounding “no thanks.”

“The existing BIXI program is not financially sustainable,” the TTC report said. “BIXI Toronto is carrying a $3.9 million capital debt and other potential financial liabilities associated with the program, and its operating revenues are currently insufficient to cover its operating costs.”

The report added that “there is no business case to support the TTC taking on additional expenses to support a non-transit initiative.”

The TTC has made the right decision. The agency, which already receives hundreds of millions of dollars in subsidies, is no position to take on another money-losing operation, which would only push up the price of fares for residents across the city.

Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI). You can reach Brady by email at: bradyyauch (at) consumerpolicyinstitute.org 

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