Hamilton's bikeshare system is at a fork in the road.

Councillors unanimously voted to approve a bikeshare program in the city last month. Now, city staffers are trying to figure out just what kind of system they should adopt so the project can move towards the Request for Proposal (RFP) stage and prospective operators can make a pitch to the city.

"We have to figure out the best way to do this and figure out how it should be structured," said Peter Topalovic, the project manager of transportation demand management for the city.

A bikeshare program — like the Bixi Bikes system used in Toronto — would allow Hamiltonians to quickly rent bikes from turnstile locations throughout the city and use them as needed.

The bikes aren't intended for long-term rentals — instead, they are usually used for one leg of a longer journey, as a connection to another form of transit, or for quick 15 to 20 minute rides.

City staffers have been studying bikeshare programs in other centres to shed some light on how ownership, infrastructure and business models work in other places.

Here's how the business models work in Toronto, Ottawa and Montreal:

  • Toronto: Bixi Bikes owns the equipment, and the business model is for profit, owned and operated. Funding sources include a capital loan, Telus/Dejardins sponsorship and user fees.
  • Ottawa: The National Capital Commission (NCC) owns the equipment, and the business model falls under its jurisdiction as well. Funding sources include the NCC, municipal capital funding, sponsorships and user fees.
  • Montreal: The City of Montreal owns the equipment and controls the business model. Funding sources include municipal tax dollars, a Telus/Dejardins sponsorship and user fees.

Topalovic wouldn't say which type of system the city is leaning towards, but did say that in the majority of the systems they've been seeing, a municipality secures the capital funding for the project and then a not for profit entity takes ownership of the system and runs it.

In Hamilton, the capital funding amounts to $1.6 million, which would cover 35 turnstile locations and 300 bikes for the city. Funds for the program would come through Metrolinx's "Quick Wins" program.

But is Hamilton ready for it?

While Sean Burak is excited about the prospect of a bikeshare system in Hamilton, the avid cyclist and owner of Downtown Bike Hounds told CBC Hamilton that the city still has a long way to go before it's "completely bikeable."

"We have some great infrastructure in this city, but most bike lanes sort of go nowhere," Burak said. "We have some great stretches of bike lanes, but then they just end."

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"We don't have a single complete bike route that crosses the city. We've got a lot of work to do."

But Topalovic is undaunted, and says that this is the time for Hamilton to implement a bikeshare program.

"We actually have, in terms of lane kilometres, more infrastructure than the cities that already have bikeshare systems," he said, adding that the city is always looking to make connections between bike lanes "more robust."

"Compared to other cities with bikeshare, we are competitive. We are not on the low end of the average," he said.

Burak, for his part, does agree that now is the right time to adopt a bikeshare system, even if the infrastructure isn't perfect. He says it's not a "chicken or egg" scenario.

"Some people would argue that it makes no sense to have a bikeshare program if we don't have a complete bike network, and there may be some truth to that," Burak said. "However, I think a bikeshare program will get more people on bikes regardless. Then that helps to make the case for infrastructure improvements in the future."

"So we may see this as a catalyst for getting more people out on bikes to prove that a complete cycling network would help the city."

Hidden costs?

Some councillors have balked at the costs of the project, even though they did end up supporting it in the end. The capital costs have been a concern, considering $1.6 million could put another two buses on Hamilton's streets.

After-the-fact costs in other systems have proven a problem for cities, too.

In 2011, the city of Montreal approved a $108-million bailout package for the Bixi bikesharing program. The city-controlled Public Bike System Company (PBSC) that runs Bixi said it needed more money to continue its expansion into other centres.

"Montrealers and the self-serve bicycle system benefit of the fact that we export bicycles outside of the country," PBSC president Roger Plamondon said at the time. "It is urgent that we have the financial leverage to continue our operations."

'I think Hamilton is really poised to make a substantial improvement to its transportation.' —Peter Topalovic, project manager of transportation demand

In fiscal 2012, PBSC expected revenue of $91 million and profit nearing $11 million. According to a Radio-Canada report, revenues are more likely to have reached $49.6 million and the profits are projected to tank, with the company losing $2.8 million.

When contacted by CBC Hamilton, PBSC communications coordinator Marie-Hélène Houle said the company would not comment on how the Bixi system has worked in other cities because the matter was still before Hamilton City Council.

Topalovic concedes that a bikeshare program would never be intended to be a moneymaker. It's a revenue-neutral enterprise, in that any profits that bubble to the top are then reinvested to expand the system.

He also wanted to make it clear that the city has no intention of dumping money into a black hole.

"We have to make sure it's understood that we are not going to bail out the operator, whoever it might be," he said. "If you hit a certain threshold and you're losing money, we're selling the system.

"We want to demonstrate to everyone that this is viable, in terms of being self-sustaining," Topalovic said.

And he says he believes it will be.

"I think Hamilton is really poised to make a substantial improvement to its transportation."

This is the third in a series of stories on public transit in Hamilton from CBC Hamilton. Check back on Thursday for a look at how public transit affects the health of a city.