For those of you outside of Montreal, STCUM is Montreal’s public transportaton system comprising primarily of subway trains and buses, though they’ve been expanding into car-rentals too. Bixi is a bicycle rental system recently established in Montreal. I don’t know if Bixi is profitable (or even whether its meant to be a for-profit project, as opposed to being subsidized by our government the same way STCUM is), but most people I’ve spoken to have a generally negative impression of it: it’s too expensive, and the pricing scheme is too confusing (you need to buy a “subscription” for $5 per day, which then allows you to rent the bike on a per half-hour basis, whose cost varies from $0 to $6 per half hour. People generally have negative impressions about the STCUM too, but since it’s the STCUM has been around for decades, and there’s no real alternative, people have generally stopped bothering to complain about it.

The STCUM prices are independent of distance traveled. Whether you go from station to its neighbor, or the the furthest other station on the system, you pay the same flat rate (in contrast, e.g. to Japan, where it costs more the further you travel). You can buy single-use tickets, a “book” of 6 tickets for a discount; a weekly pass (which gives you unlimited access to the system for 1 week), and a monthly pass. Previously, a monthly pass was a magnetic card which you’d swipe through a sensor to use. Recently, the STCUM is pushing for a transition to the so-called “Opus” card, a smart card which you buy once, and “recharge” when your pass or tickets runs out. Whether you buy the traditional magnetized card, or recharge your Opus with a digital pass, the price is the same, which is around $70 for a monthly pass these days.

To me, Bixi looks like it’s poised to become a big failure unless some drastic changes are done. And as I mentioned earlier, the biggest complaints seem to be that it’s too expensive, and the pricing scheme is too confusing. I think both of these problems could be solved if Bixi were to integrate itself with the STCUM.

Both companies have a similar goal: to reduce car-traffic, especially downtown, via public transportation, and thus both companies seem to be targeting the same demographic. Instead of competing, the two services can complement each other. STCUM should acquire Bixi (or the other way around; it doesn’t really matter, but I suspect STUCM is bigger) and then have Bixi as an optional upgrade on your monthly pass. I don’t know what the economics are of running an operation like Bixi (particularly if you have an existing infrastructure like the STCUM does), but if I could get virtually (I’ll explain what I mean by “virtually” later on) unlimited access to Bixi for an extra $5 ontop of my monthly pass, I’d definitely subscribe, even though I predict I will almost never use Bixi. For an extra $10, it becomes a “maybe”, and for $20, it’s a “probably not, but plausible”.

This solution definitely solves the “complex pricing scheme” problem, but what remains open is whether it solves the “it’s too expensive” issue. Can the STCUM afford to maintain Bixi at $20 per monthy, when Bixi currently charges… well, whatever it is they charge? I don’t know, but two things worth noting is that the STCUM is subsidized by the government, and there will probably be a significant number of customers who, like me, will pay the monthly fee, but virtually never use Bixi bikes. Then again, there will likely be many more Bixi users once this new plan is in place, possibly driving up the maintenance costs. That said, I almost always see the bike racks full, and unused, and very rarely see anyone actually using a Bixi bike anywhere. As such, I’m assuming that currently Bixi is taking on a lot of losses, mainly from sunk costs of just having the system in place, and having more usage at a lower revenue, even if it raises maintenance costs, would be a net gain for them.

Another issue is that the reason Bixi’s pricing scheme is so complicated is that they want to encourage circulation of the bikes. They don’t want, for example, someone renting the bike for a month, taking it home, and keeping it for a month. That’s why, for each half hour that you keep it, that half hour is more expensive than the previous half hour. While I understand the sentiment, I think half an hour is a very easy limit to hit, and so is a big deterrent to a lot of people considering the service. Plus it seems that they are having trouble communicating to the customers that if they keep the bike longer than for half an hour, they will be charged extra, leading to a lot of bad first impressions with the service. I would recommend that they increase the time units up to two hours. So the first two hours is free (assuming you’ve already bought a “subscription”), then every two hours from there is more expensive than the last. This way, a lot of people won’t even encounter the limit, and you can easily inform the customer that they must return the bike within 2 hours or face additional fees. I guess when you use the machine, it would print out the time-of-purchase and due-time on the receipt.

There are other problems with Bixi, but I might be able to express them in 140 characters, so I’ll save them for my Twitter. The conclusion is that right now, Bixi looks like a failure, and what they really need to do is focus on getting people to try the bikes, and having a positive experience from it. When I’m walking downtown, and I see bike racks full of unused Bixi, this is just confirming my suspicion that the service is a piece of crap (or else the bike racks would be all empty, the bikes currently being in use). They need to destroy this perception, and get the bikes into circulation, even if it means at a loss at first.