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The Case of Bixi Bikes: A Learning Opportunity for Social Enterprise

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Living in and around New York City, it has been hard to miss the explosion of blue bicycles that have found themselves throughout the city streets. Last month, in warmer weather, I enjoyed one as I went from meeting to meeting in Manhattan. Those bikes were supplied by a Montreal-based company, called Bixi, which has provided over 37,000 bicycles and payment technology platforms for bike-sharing programs around the world. Sounds like a potentially great idea and operation, yes? This month Bixi filed for bankruptcy protection.

What happened? According to Co.Exist, an online magazine, bike programs like Bixi have proven to be too "expensive to build, operate and maintain," and the Minneapolis St. Paul Business Journal reported in November that Bixi (also known as Public Bike System Co.) is experiencing "financial challenges, disputes with its software subcontractor and plans to restructure." Bixi is in a legal dispute with Nice Ride Minnesota, a popular bike-sharing program, which states that the company is in "material breach" of its current contract.

Bixi started with much fanfare as the City of Montreal helped start, invested in and supplied initial contracts to the nonprofit. The social enterprise was able to distinguish "itself from earlier bicycle-sharing systems by using solar power and docking stations that relied on wireless networks for communications," according to The New York Times. Bixi systems have been installed in a number of other cities, including Washington, Boston, Chicago and San Francisco, but now the troubled effort is reporting over $45 million in debt and may be on its way out.

While the road may be rocky for Bixi, there are signs of promise in other smaller efforts. This month in Kansas City, BikeWalkKC, a nonprofit that runs a bike-share program, launched to build new bike stations throughout the city. Kansas City had the unfortunate distinction six years ago of being ranked dead last for two-wheeled commuting by the U.S. Census Bureau. The effort is currently working to secure funding and is using crowdfunding as part of its fundraising solution. According to a MIT researcher, the BikeWalkKC effort has become the largest civic crowdfunding effort ever attempted.

As we think about the growing social entrepreneurship movement, we have begun to see the start of some failures, which, according to Ruth McCambridge at the Nonprofit Quarterly, could be a good for the movement. He stated, "We tend to believe that as we move further into social enterprise, we will all find out, through failures even more than successes, what works and what does not." As it relates to Kansas City as they look at Bixi, I am sure they are taking note to both this financing approach and how their approach might be better served as we look to the future of this type of initiative.