'The Uphill Push to Save a Bike-Share Pioneer' diff viewer (0/1)

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The Uphill Push to Save a Bike-Share Pioneer	The Uphill Push to Save a Bike-Share Pioneer
2015-01-10 01:07:03 UTC	2015-01-11 13:38:11 UTC (1 day later)
The typical origin story for a tech company includes a paper napkin and a garage. But the company that powers the bike-sharing programs in New York, London, Chicago and a dozen other cities started much differently: It began with a municipal parking authority, wound through bankruptcy court and got another shot at corporate viability off the Madagascar coast during the annual hatching of the green sea turtles.	The typical origin story for a tech company includes a paper napkin and a garage. But the company that powers the bike-sharing programs in New York, London, Chicago and a dozen other cities started much differently: It began with a municipal parking authority, wound through bankruptcy court and got another shot at corporate viability off the Madagascar coast during the annual hatching of the green sea turtles.
Observing that ritual last year with a group of scientists, Bruno Rodi, a Canadian real estate developer, saw firsthand how those endangered reptiles are threatened by climate change, pollution and hunters. “When you go in extreme areas on the planet, you can vividly see that we’re really destroying the planet,” Mr. Rodi recalled. A globe-trotting adventurer, he has climbed the ~~world’s~~ ~~seven~~ highest ~~mountains,~~ visited the North and South Poles and rowed more than 5,000 miles across the Indian Ocean. “I started to get conscious about this,” he said.	Observing that ritual last year with a group of scientists, Bruno Rodi, a Canadian real estate developer, saw firsthand how those endangered reptiles are threatened by climate change, pollution and hunters. “When you go in extreme areas on the planet, you can vividly see that we’re really destroying the planet,” Mr. Rodi recalled. A globe-trotting adventurer, he has climbed the highest mountain on every continent, visited the North and South Poles and rowed more than 5,000 miles across the Indian Ocean. “I started to get conscious about this,” he said.
The turtles — and their precarious existence — set off a burst of environmental entrepreneurialism in Mr. Rodi.	The turtles — and their precarious existence — set off a burst of environmental entrepreneurialism in Mr. Rodi.
Aboard a ship on the Indian Ocean, he heard that the bike-sharing company, which is now known as PBSC Urban Solutions, was available for purchase. From a satellite phone, he bid about $4 million in cash to buy the company out of bankruptcy. He did this without hiring lawyers and accountants to scour the books.	Aboard a ship on the Indian Ocean, he heard that the bike-sharing company, which is now known as PBSC Urban Solutions, was available for purchase. From a satellite phone, he bid about $4 million in cash to buy the company out of bankruptcy. He did this without hiring lawyers and accountants to scour the books.
“I’m not very rich, but I’m not a poor person,” said Mr. Rodi, a multimillionaire who also owns a Canadian furniture company and whose name is synonymous with sofas in Quebec. “So when this came on the market I said, ‘Well, that’s ~~interesting.’ ”~~	“I’m not very rich, but I’m not a poor person,” said Mr. Rodi, a multimillionaire who also owns a Canadian furniture company and whose name is synonymous with sofas in Quebec. “So when this came on the market I said, ‘Well, that’s interesting.' ”
He quickly learned why due diligence matters.	He quickly learned why due diligence matters.
The core of the international business was sound, even profitable by Mr. Rodi’s assertion, although he would not go into the financial specifics of the private company. As Mr. Rodi likes to say, it is the “Rolls-Royce of bike-share systems,” with sturdy equipment and solar-powered Wi-Fi docking stations.	The core of the international business was sound, even profitable by Mr. Rodi’s assertion, although he would not go into the financial specifics of the private company. As Mr. Rodi likes to say, it is the “Rolls-Royce of bike-share systems,” with sturdy equipment and solar-powered Wi-Fi docking stations.
But the company, which was started by the city of Montreal, was starved for capital and crippled by a disastrous decision to change software systems. Bankruptcy only added to its woes, as the company faced shortages of parts and products and as rivals snatched up top customers, like the new Seattle bike-share system.	But the company, which was started by the city of Montreal, was starved for capital and crippled by a disastrous decision to change software systems. Bankruptcy only added to its woes, as the company faced shortages of parts and products and as rivals snatched up top customers, like the new Seattle bike-share system.
The industry, in the meantime, has evolved. Once a curiosity favored by politicians to improve their environmental credentials, bike sharing has increasingly become an accepted piece of transit infrastructure. Major cities with established systems are expanding them, while communities outside Europe and North America are turning to bike sharing as a partial answer to urban gridlock.	The industry, in the meantime, has evolved. Once a curiosity favored by politicians to improve their environmental credentials, bike sharing has increasingly become an accepted piece of transit infrastructure. Major cities with established systems are expanding them, while communities outside Europe and North America are turning to bike sharing as a partial answer to urban gridlock.
In the early days, PBSC was one of the few companies to focus on bike sharing, making it the default choice for many cities. Now PBSC, which supplies systems to 15 cities and two university campuses, must compete against a growing number of suppliers of sophisticated equipment and technology. Some of those newcomers have surpassed PBSC with advances like smartphone apps to access bikes.	In the early days, PBSC was one of the few companies to focus on bike sharing, making it the default choice for many cities. Now PBSC, which supplies systems to 15 cities and two university campuses, must compete against a growing number of suppliers of sophisticated equipment and technology. Some of those newcomers have surpassed PBSC with advances like smartphone apps to access bikes.
In one of his first moves, Mr. Rodi hired nearly two dozen developers to fix PBSC’s software problems and then to bring the system into the age of the mobile Internet. He is also crisscrossing the globe to find new customers and to keep existing ones. Mr. Rodi says he is willing to spend tens of millions if necessary to revive the company’s fortunes.	In one of his first moves, Mr. Rodi hired nearly two dozen developers to fix PBSC’s software problems and then to bring the system into the age of the mobile Internet. He is also crisscrossing the globe to find new customers and to keep existing ones. Mr. Rodi says he is willing to spend tens of millions if necessary to revive the company’s fortunes.
“Will we have success with it?” he said. “Yes, sir, we will have a success with it.”	“Will we have success with it?” he said. “Yes, sir, we will have a success with it.”
When Montreal introduced its bike-sharing system in 2009, city officials simply wanted to make commuting easier. The city would be blanketed with almost 10,000 bike stations to fill in gaps not covered by trains, subways and buses.	When Montreal introduced its bike-sharing system in 2009, city officials simply wanted to make commuting easier. The city would be blanketed with almost 10,000 bike stations to fill in gaps not covered by trains, subways and buses.
But the Montreal City Council didn’t want to pay for the system, the Société de Vélo en Libre-Service, known more commonly as Bixi. So, like other cities, it funded the service in part through user fees and advertisements plastered on the bikes. To pay for the rest, officials were counting on creating an international business that would sell its proprietary bike-share technology to cities around the world.	But the Montreal City Council didn’t want to pay for the system, the Société de Vélo en Libre-Service, known more commonly as Bixi. So, like other cities, it funded the service in part through user fees and advertisements plastered on the bikes. To pay for the rest, officials were counting on creating an international business that would sell its proprietary bike-share technology to cities around the world.
Montreal’s system wasn’t the first large-scale municipal bike-sharing program, a distinction usually attributed to Copenhagen, which started one in 1995. But Bixi was considered one of the most innovative, with technologies specifically designed for bike sharing.	Montreal’s system wasn’t the first large-scale municipal bike-sharing program, a distinction usually attributed to Copenhagen, which started one in 1995. But Bixi was considered one of the most innovative, with technologies specifically designed for bike sharing.
One of the biggest attractions was the bike itself. Rather than using inexpensive equipment that proved vulnerable to vandalism and breakdowns, the industrial designer Michel Dallaire came up with a durable, if costly, aluminum bike. Modifications thwarted thieves from easily unbolting parts.	One of the biggest attractions was the bike itself. Rather than using inexpensive equipment that proved vulnerable to vandalism and breakdowns, the industrial designer Michel Dallaire came up with a durable, if costly, aluminum bike. Modifications thwarted thieves from easily unbolting parts.
“That bike, nobody can argue with his bike,” said Josh Squire, the chief executive of CycleHop, a bike-share operator that does not use the Bixi technology.	“That bike, nobody can argue with his bike,” said Josh Squire, the chief executive of CycleHop, a bike-share operator that does not use the Bixi technology.
The Montreal company also developed free-standing docking stations with solar panels for power and Wi-Fi to transfer payment and operations data. The stations, which can be lifted onto the back of a truck, could be easily removed for road repairs, construction projects or unfriendly Montreal winters.	The Montreal company also developed free-standing docking stations with solar panels for power and Wi-Fi to transfer payment and operations data. The stations, which can be lifted onto the back of a truck, could be easily removed for road repairs, construction projects or unfriendly Montreal winters.
But the city’s dream of self-financing proved elusive. While money was flowing in from foreign buyers, it was immediately going out again to keep Montreal’s bikes rolling. Users could buy passes of various durations at rates that had been set unrealistically low, while operating costs were higher than anticipated. That left the company struggling to pay its suppliers.	But the city’s dream of self-financing proved elusive. While money was flowing in from foreign buyers, it was immediately going out again to keep Montreal’s bikes rolling. Users could buy passes of various durations at rates that had been set unrealistically low, while operating costs were higher than anticipated. That left the company struggling to pay its suppliers.
“All this money, all this profit used to go in the Montreal operation,” Mr. Rodi said. “They were transferring that money to satisfy the politicians because that was the mandate of the company: ‘Give us bike ~~share.’ ”~~	“All this money, all this profit used to go in the Montreal operation,” Mr. Rodi said. “They were transferring that money to satisfy the politicians because that was the mandate of the company: ‘Give us bike share.' ”
While the cash problem was temporarily resolved with loans from the city, management’s attention was soon distracted by a pricing spat with 8D Technologies, the supplier that created the software for Bixi. The city-owned company cut off its contract with 8D and developed new software on its own for future systems, including Citi Bike in New York.	While the cash problem was temporarily resolved with loans from the city, management’s attention was soon distracted by a pricing spat with 8D Technologies, the supplier that created the software for Bixi. The city-owned company cut off its contract with 8D and developed new software on its own for future systems, including Citi Bike in New York.
That hurried software was a disaster, not just because it was full of problems, but also in terms of customer relations. Jon Orcutt, who championed Citi Bike during his time as director of policy at the New York City Transportation Department, said it picked PBSC’s technology based on the earlier software.	That hurried software was a disaster, not just because it was full of problems, but also in terms of customer relations. Jon Orcutt, who championed Citi Bike during his time as director of policy at the New York City Transportation Department, said it picked PBSC’s technology based on the earlier software.
“That was not the system we got,” he said. Mr. Orcutt, who left the department last year, blames the software, in part, for the introduction delays and other problems with Citi Bike. At one point, he said, docking stations failed 10 percent of the time to release a bike.	“That was not the system we got,” he said. Mr. Orcutt, who left the department last year, blames the software, in part, for the introduction delays and other problems with Citi Bike. At one point, he said, docking stations failed 10 percent of the time to release a bike.
The crisis for PBSC peaked in 2013. Amid disputes with suppliers over payments, shortages of bikes and parts developed. The Montreal authority repeatedly missed deadlines to file financial statements. Not long after he became Montreal’s mayor, Denis Coderre took action, placing Bixi in bankruptcy last year. A court allowed the city to keep its bike-share system while selling the international sales unit. What was supposed to have been a free ride cost Montreal about $25 million.	The crisis for PBSC peaked in 2013. Amid disputes with suppliers over payments, shortages of bikes and parts developed. The Montreal authority repeatedly missed deadlines to file financial statements. Not long after he became Montreal’s mayor, Denis Coderre took action, placing Bixi in bankruptcy last year. A court allowed the city to keep its bike-share system while selling the international sales unit. What was supposed to have been a free ride cost Montreal about $25 million.
Mr. Rodi, 59, is an unlikely champion for a bike-sharing technology company.	Mr. Rodi, 59, is an unlikely champion for a bike-sharing technology company.
Other than once riding a Tour de France route as a personal challenge, he rarely cycles. He has no background in transit or municipal infrastructure. His technology experience is minimal.	Other than once riding a Tour de France route as a personal challenge, he rarely cycles. He has no background in transit or municipal infrastructure. His technology experience is minimal.
While walking around a workshop at PBSC’s new headquarters in a Montreal suburb, Mr. Rodi picked up a circuit board out of a tray of electronic components. Its function, he acknowledged, was a complete mystery to him.	While walking around a workshop at PBSC’s new headquarters in a Montreal suburb, Mr. Rodi picked up a circuit board out of a tray of electronic components. Its function, he acknowledged, was a complete mystery to him.
Mr. Rodi is nonetheless determined, likening his task to climbing Mount Everest, which he did in 2003. “If you look from the outside it might be a big mess,” he said. “But I would say bigger the mountain, the higher the challenge; bigger the mess, the higher the challenge.”	Mr. Rodi is nonetheless determined, likening his task to climbing Mount Everest, which he did in 2003. “If you look from the outside it might be a big mess,” he said. “But I would say bigger the mountain, the higher the challenge; bigger the mess, the higher the challenge.”
After buying PBSC, Mr. Rodi made a major strategic shift, by getting the company out of the politically fraught business of actually operating bike-share systems. Instead, it would focus solely on selling hardware and software for others to run.	After buying PBSC, Mr. Rodi made a major strategic shift, by getting the company out of the politically fraught business of actually operating bike-share systems. Instead, it would focus solely on selling hardware and software for others to run.
“We’re going back to our core business, which was to build this machine,” Mr. Rodi said. “I don’t need to worry about how many workers there are on this street or in that city. It’s not my job.”	“We’re going back to our core business, which was to build this machine,” Mr. Rodi said. “I don’t need to worry about how many workers there are on this street or in that city. It’s not my job.”
The recovery plan is two-pronged. For growth, PBSC is promoting bike sharing as the answer for cities with traffic congestion. The message, Mr. Rodi said, particularly resonates in Latin America. (The circuit boards that baffled him were destined for docking stations being built for a new system in Guadalajara, Mexico.)	The recovery plan is two-pronged. For growth, PBSC is promoting bike sharing as the answer for cities with traffic congestion. The message, Mr. Rodi said, particularly resonates in Latin America. (The circuit boards that baffled him were destined for docking stations being built for a new system in Guadalajara, Mexico.)
Perhaps more crucially, PBSC must convince its current customers that the chaos is over. Mr. Rodi is leading the quest for forgiveness, putting in 16-hour days and making visits around the world to system owners. Cupping his hands upward like a beggar holding a bowl, Mr. Rodi said, “When you go like this to people and say ‘We’re human,’ people say: ‘O.K., tell me what you have to tell ~~me.’ ”~~	Perhaps more crucially, PBSC must convince its current customers that the chaos is over. Mr. Rodi is leading the quest for forgiveness, putting in 16-hour days and making visits around the world to system owners. Cupping his hands upward like a beggar holding a bowl, Mr. Rodi said, “When you go like this to people and say ‘We’re human,’ people say: ‘O.K., tell me what you have to tell me.' ”
Mirte Mallory, the co-founder and director of WE-cycle, a bike-sharing program in Aspen, Colo., said PBSC tested her patience leading up to the bankruptcy. Not long after Mr. Rodi took over, she said, the situation changed. Instead of excuses and delay, Ms. Mallory said, the company was offering quick responses to requests.	Mirte Mallory, the co-founder and director of WE-cycle, a bike-sharing program in Aspen, Colo., said PBSC tested her patience leading up to the bankruptcy. Not long after Mr. Rodi took over, she said, the situation changed. Instead of excuses and delay, Ms. Mallory said, the company was offering quick responses to requests.
With just 100 bikes, 14 docking stations and a service shutdown each winter, the Aspen program relies heavily on visitors rather than regulars. Working with Aspen’s website developer, PBSC developed a system that allows visitors to register online in advance. “They recognized that product development is what needs to happen,” Ms. Mallory said.	With just 100 bikes, 14 docking stations and a service shutdown each winter, the Aspen program relies heavily on visitors rather than regulars. Working with Aspen’s website developer, PBSC developed a system that allows visitors to register online in advance. “They recognized that product development is what needs to happen,” Ms. Mallory said.
Complicating Mr. Rodi’s crusade is the hangover from PBSC’s past.	Complicating Mr. Rodi’s crusade is the hangover from PBSC’s past.
In the United States and some other markets, its systems were sold exclusively by Alta Bicycle Share. Since the Montreal company’s bankruptcy, Alta has gone from marketing partner to competitor. Alta recently allied itself with PBSC’s former software supplier, 8D, to win a contract to build a new system for Seattle.	In the United States and some other markets, its systems were sold exclusively by Alta Bicycle Share. Since the Montreal company’s bankruptcy, Alta has gone from marketing partner to competitor. Alta recently allied itself with PBSC’s former software supplier, 8D, to win a contract to build a new system for Seattle.
Alta also got its financial house in order. Previously an underfunded branch of a relatively small infrastructure planning firm, Alta was bought in October by a group of private investors that includes the chief executives of the Related Companies, the large New York real estate firm, and Equinox, the fitness chain. As Alta’s new head, they installed Jay Walder, the former chairman and chief executive of the Metropolitan Transportation Authority in New York, who also held a senior position at Transport for London, the city’s transportation authority.	Alta also got its financial house in order. Previously an underfunded branch of a relatively small infrastructure planning firm, Alta was bought in October by a group of private investors that includes the chief executives of the Related Companies, the large New York real estate firm, and Equinox, the fitness chain. As Alta’s new head, they installed Jay Walder, the former chairman and chief executive of the Metropolitan Transportation Authority in New York, who also held a senior position at Transport for London, the city’s transportation authority.
Both of those cities’ transit systems currently use PBSC technology. Alta also oversees other programs, relying on the PBSC technology, in Toronto; Boston; Washington, D.C.; Columbus, Ohio; Chattanooga, Tenn.; and in some of the Bay Area. The situation makes PBSC’s status in those places more uncertain.	Both of those cities’ transit systems currently use PBSC technology. Alta also oversees other programs, relying on the PBSC technology, in Toronto; Boston; Washington, D.C.; Columbus, Ohio; Chattanooga, Tenn.; and in some of the Bay Area. The situation makes PBSC’s status in those places more uncertain.