The BIXI bike-sharing rental system has been successful in Montreal, where thousands of subscribers have signed up. ((Corinne Smith/CBC))

Toronto city council has voted to guarantee a $4.8 million startup loan for a bike rental company, if the firm can first generate 1,000 subscribers and private sponsorship support.

"I'm predicting this is going to be very, very successful," said Toronto city councillor Glenn De Baeremaeker, who pushed hard for the bike-sharing service.

On Tuesday, city council voted 38-8 to support the plan, which would see about 1,000 bicycles parked at 80 stations across the city in May 2011.

For a fee of $78 per year, $28 per month, or $5 per day, residents and visitors would be able to use a bicycle. 

The Public Bike System Company runs a similar Bixi (bicycle taxi) program in Montreal.

The Montreal operation has about 3,000 bikes parked at about 300 stations across the city. 

"At the end of [its first] year Montreal had 20,000 subscribers," said De Baeremaeker.

The city has insisted that the company be able to prove it has at least 1,000 subscribers by the end of November 2010 as well as $600,000 in sponsorship deals to secure the loan guarantee.

"You have to go out and get your sponsorship money. If you don't get it, the deal's off. You have to get at least 1,000 subscribers, or the deal's off," the councillor said.

Programs like the one proposed for Toronto exist in some European cities, like Paris and Berlin, where people can pick up a bike, cycle, and then drop it off at the nearest bike station.