Montreals Innovative Public Bike System Bixi

Bixi is Montreal’s innovative public bike sharing system. It came out with successful launch in the spring of 2010 though they introduced the system on September 21, 2008 in Montreal, Canada by the city’s parking authority. “Stationnement de Montreal” a public body operates this service. During this two years journey they come across with selection of the bike’s name, test launch, operation activities, marketing communication plan to promote it etc.

The purpose of this report is to identify Bixi’s nature and scope of operation, operation strategies, changes and challenges and their future.

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The idea and system of this bike sharing project is absolutely great and it is a successful sample model of any future innovation in this sector. However, the project is integrated with design, technology, scheduling, quality management and also ideal innovation in location choosing, layout, efficient supply chain management and capacity maintaining, although it is needed to make some research and development for better service.

The operation strategy of BIXI is basis of It’s Mission, objectives distinctive competence and strategic decision. The report shows how Bixi’s operation strategy ties up with the Schroeder (2010) and Slack et el (2010) operation strategy model.

However, there are some challenges and changes they might face in the future. Those challenges and changes might oppose great threat for their sustainability in long term business.

Introduction:

Bixi Montreal’s innovative system is a system that allows the transportation system to be environmentally friendly, reduction in traffic congestion and a good form of exercise for the citizens. It is a great concept for both kinds of cities (big or small), no matter how big or small the city is, with using cutting edge technology it makes the system operationally cost effective.

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Design of Bixi bike:

According to the case study, Bixi is a blend of practicality and aesthetics which was created from a clean sheet. Bixi, combinational of two words-‘bicycle and taxi’ was designed by world renowned industrial designer Michel Dallaire. The Bixi bike system is consisted of technical platforms, bike docks, bikes, pay stations and backdoor software. Being made of aluminium the bike is too light (20 kilograms). One of the distinguishing features of this system is, the entire system is solar powered and it doesn’t need any permanent bolting that helps to remove and move the system easily from one place to another. Radio Frequency Identification (RFID) is another distinguishing feature that helps the system to track the user who uses the bike through its powerful RFID tags.

BIXI’S all the features are listed below:

Frame

It’s got aluminium frame which is light , strong and durable

It has one-piece handlebar that covers and protects all the components

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Bixi’s Chain protector integrated into bike structure that protects the chain

and Prevents riders clothing from getting wedged in the chain

It increases structural integrity of entire frame

Other Features

Front and rear internal brakes makes the rider more safety

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The adjustable seat positioning – standardized through entire fleet of bikes.

This is suitable for wide range of riders

The system got Low centre of gravity for greater stability

And finally the tires – made for the urban jungle and it’s got Nitrogen in it that normally takes more time to leak out.

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Location:

In Montreal the BIXI system already provided 3000 bikes and 300 dock stations which are located around the Montreal’s city. According to the case study, the dock station for the bike was set up based on the density of the area. The 3000 bikes with around 300 stations are in the three boroughs of Rosement which are La Pattie-Patrie, Le Plateau Mont- Royal and Ville-Marie. At the same time in the areas of Outremont and the Sud-Ouest, there are some dock stations. According to Stationnement de Montreal, each dock station distance one from another 300 meters on an average. Most of the dock stations are located near the train station, university, college and near the shopping mall. Some example of station locations are at below:

Station at Phillips Square,Station at the corner of President- Kennedy and University Streets, Station at the corner of University Street and Maisonneuve Boulevard and Station at Mont- Royal Metro station.

Layout:

The word ”Layout” is considered the total process through which a user can access the product in a hassle free and easy way. In the context of Bixi bike system, Layout means the customer’s journey from the pay till return back. In a sentence, people come to the dock stations, hire bikes, ride it and then return back to the dock stations mean the layout of the project. At that time it is a good layout when it seems that the system could used by all kinds of customer in an easy way.

In a dock station, at least two or more technical platform is established for easy access for people and to avoid rush in a busy hour. A ”Pay As You go” pay station is set up in a platform. Payment facility is available in the station for bike rental and parking space rental for other vehicles parking. The system accepts payment through bike pass, Canadian cash, and credit card. A printed ticket is delivered for the proof of payment where it shows the time of expiry. When the bike is taken out the reader linked the bike details and the user details by automated system. After using, the user should return the bike to any dock station which he preferred.

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It is a great layout of the Bixi bike system because the whole process goes through in a kind of controlled way. On the other hand they have got some challenges like theft and vandalism that’s why they need to be more concern about such challenges for improvement of their service.

Supply Chain:

In the Bixi bike system, Stationnement de Montreal outsources a company named ”Cycles De Vinci” who is asked to make the bike for the project. Bixi, Montreal bike’s supply chain could be following model;

Aluminium

User

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Dock Station

Stationnement de Montreal

Manufacturer

Cycles DeVinci

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Rubber(Seat, Mud Guard)

Tools (Screw, Paddles)

The manufacturer, “cycle de Vinci” purchases raw materials such as aluminium, rubber and tools from three different suppliers. The manufacturing company ”Cycles De Vinci” produces the bikes with the specific design and delivers to the mother organization ”Stationnement De Montreal”. The project authority establishes the dock station and placed the bikes into the specific dock station. The user then easily get access the bikes from their nearest and preferred dock station.

Outsourcing is good for a business (for example, it is time consuming, cheaper, less hassle). However to maintain the quality Bixi could design and manufacture its bikes itself because Bixi’s materials are unique and another big issue is security. Supply chain activity will work through if demand of the bike doesn’t fall down. Well, the demand of the bike might fluctuate but it cannot be under demanded. If one element of supply chains doesn’t work properly, the total system will be disappeared.

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Scheduling:

Scheduling in Bixi Bike system relates how many hours of the day the bike is available, the pick hour of the day and how many months’ bikes are available for sharing in a year.

Actually the system is operated in seven months, between mid April and mid November in a year. Because of bad weather in the winter, the dock station and the infrastructure is removed because it is almost impossible to run the system in the bad or foggy weather.

Quality Management:

Stationnement de Montreal concerns about their quality management as well. They maintain the quality for product (bike) and customer service. They do some daily maintenance for quality control which includes some activities such as minor and major bike repairing at workshop, software maintenance etc.

On the other hand, they have got effective call centre management team (who helps customers for enquiries and difficulties), subscriber’s management and automated call routing and information management system to support their customers.

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Those are great activities but still they need some improvements in their operation and distribution so that customers are well served.

BIXI public bike sharing Operation Strategy:

The BIXI public bike sharing provides an example of operation strategy along with its consistent development over time. The BIXI public bike sharing system was designed looking at reducing air pollution, traffic congestion. As Bixi bike doesn’t produce any emissions that the fuel powered vehicles are producing. It has been asked in the question to come up an Operation strategy for BIXI Public Bike sharing scheme that ties up with Schroeder (2010) operation strategy model and Slack et el (2010) operation strategy model.

Corporate Strategy

Figure: 1.1 Schroeder (2010)

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Business StrategyOperation strategy model

Operation strategy

Functional strategies in

Marketing, finance,

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Engineering,

Human resources, and

Information systems

Internal Analysis

Mission

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Distinctive

Competence

External Analysis

Objectives (Cost, Quality, Flexibility and delivery)

Strategic Decision (Process, Quality, Capacity and Inventory)

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Consistent Pattern of Decision

Result

Looking at figure 1.1, According to Schroeder (2010) model, an organization is consisted of different departments. They are marketing, human resources, sales, finance, and engineer and information technology department. Each department has different functions in the organization. But for running the organization all the departments have to come together along with the operation manager. That helps a company to set up its corporate strategy and business strategy. They also help the company to run according to its mission. At the same time it also assist the company to choose its distinctive competence and objectives and making up company’s strategic decision.

Schroeder (2010) model in Bixi:

Like other successful businesses operation strategy BIXI Public bike sharing scheme got its own mission, objectives, strategic decisions and the distinctive competence.

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According to the case study, Bixi public bike sharing is a government project in a government department where the government could be corporate strategy. Then the business strategy could be the transport division. BIXI is one project in the transport division. In the BIXI Public bike sharing, Bixi has a mission. The mission is to provide a unique service transformation system and a supply chain that would provide a healthy transportation system in accordance with promises made to customers and the ability to give a response in accordance with customers demand at a lower price.

Every business has specific strategy as like as BIXI bike. It considers cost, quality, capacity and service. According to Allain Ayotte the Executive vice president of Stationnement de Montreal, Bixi is “not a mercantile project- it’s a social project.” It doesn’t want to do any profit, it just charge the customers a little amount of money only for the bike maintenance. For instance, the first half an hour is free, second half an hour C$1.5 and so on. As part of Bixi’s objective, it always looks at the quality of the system, the flexibility and the availability of the bikes. The customers want to know how flexible the system is, and the availability of the bikes. Obviously the customers would not wait for the bike half an hour; they want the bike on time. Bixi’s online checker makes it easy for customers to check the availability of the bikes and 3000 bikes ensure the availability of the bikes.

According to Schroeder (2010) model, Bixi’s strategic decisions are made in each of the four groups of operations decisions (process, quality, capacity and inventory). The process of Bixi public bike sharing is designed with specific equipment and flows to ensure that the Montreal’s local people get the bike at the right time at the right place. The case study shows to provide great customer service and great quality, Staitionnement de Montreal looks at call centre management, subscriber management, automated and call routing, and information management via their website. The case study also shows, Montreal is a market where bike is a popular transport and it is more popular because of 3000 BIXI bike at 300 dock stations in Montreal now, for the local people, local students, in a word for Montreal’s community. This is the capacity of BIXI bike, which are available for the Montreal’s people. When Staitionnement de Montreal looks at its capacity they look the number of bikes are needed for pick and off pick time, how many bikes needed in busy areas, how many in a less crowdy areas. Then they run that number of bikes on the road looking at the number of total customers using the bike.

The fourth element for the BIXI public bike sharing operation strategy is the Distinctive competence. The system uses the cutting edge technology. The entire system is solar powered that doesn’t need any permanent bolting. The Radio Frequency Identification (RFID) enables the system to track the bike and reduce bike theft and vandalism. These all are the distinctive competences for Bixi public bike sharing system.

In BIXI the other cross functional groups working together effectively with the Operation manager. Because the case study shows, the IT people track the bike user’s details and trace the thief if the bike is stolen. The Engineer is responsible for maintenance of the system if any defect with the bike or with the system. Although Bixi doesn’t do any marketing but before launching the system successfully, Bixi did some marketing just to know people interest about the system. It introduced 40 bikes in four different places in Montreal city. So these are the all cross functional departments come along with the operation manager in BIXI bike system to run the system successfully. That led the system to meet up its mission, objectives, business strategy and operation strategy.

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Slack et el (2010) operation strategy model in BIXI:

Top-down Strategy

What the business wants operations to do

Figure: 1.2

Market Requirements Strategy

What the market position requires operations to do

Operations Resource Strategy

What operations resources can do?

Operations strategy

What day-to-day experience suggests operations should do

Bottom-up Strategy

Source: Slack et el (2010) operation strategy model

In Slack et el (2010) operation strategy model theory, there are four types of operation strategy. They are top-down strategy (what business wants to do), bottom-up strategy (what day to day experience suggests operations should do), market led strategy (what the market position requires operations to do) and operations led strategy (what operations resources can do). In Bixi bike the operation was like a set of schemes for the operation manager that led to top-down strategy.

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According to Slack et el (2010), The top-down strategy is an operation strategy in which the operation strategy derived from and is supportive of the organizations business strategy, in that strategy the organisation realizes its business strategy. Then this business strategy led to the business the operation task. For example, if for BIXI bike the business strategy is offering the low prices. Then the operation’s task should be achieving low costs in operation and then offer the bikes at a low price which is being done by BIXI. For instance, the first half an hour is free, then the second half an hour is C$1.5, for the whole day C$5 and so on.

If the business strategy for BIXI bike is based on offering the bikes whenever customers want, then the operation task would be to ensure the bikes are at right place at the right time. In Montreal, BIXI has 3000 bikes and 300 dock stations only to make sure the customers get the bike on time.

Similarly, all the functions in the Montreal BIXI bike sharing, are working smoothly that makes the whole system innovative. For example, the bike, the technical platform, the pay station, the bike dock and the backroom software are the components of entire package that makes the bike distinguishing from any kind of bikes and these functions organize themselves to support the business objectives. Some major activities that part of the different functions under Bixi operations are below in the boxes that are working with a great efficiency.

Station Installation

System start-up

Station Maintenance

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Bike docks

Pay stations

Technical platforms

Solar power system

Bike maintenance

Daily maintenance

Minor repairs on site

Major repairs at workshop

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Software Maintenance

Source: “The Public Bike System, Hello- Our Wheels Your Freedom,”

However at present, Bixi needs to come up with the Bottom- up strategy. Because As the operation manager of Bixi, he needs to respond to customers demand, seeking problem solutions and copy good practices in other organization although BIXI did looking at previous this kind of programme (Velib). But still lots of demand will be arising from customers. People want to see the BIXI not for a particular city; they would like to see BIXI for the whole Canada. People from one city will be able to ride the bike with the same membership card. BIXI needs to respond to all and that led to lots of decisions. In this kind of strategy, operation manager needs to take some actions. This operation goes through in a continuous improvement of series of work rather than finish everything at a time that needs a big investment. Bixi needs to stand in the customer shoes and think itself a customer. Then need to listen to the customers, what customers want. According to customer expectation BIXI needs to set up its operation strategy although BIXI has done a great job so far.

Key challenges of Bixi, Montreal’s innovative public bike sharing system:

As of April 2009, Stationnement de Montreal had a plan to launch in Montreal in May 2009. They knew that they would have to face some challenges that would crop up after they launch their system and around the same time they conducted a test launch in Minneapolis and then they came up with a full-fledged launch in the spring of 2010(according to case studies).

However according to case studies the key challenges are,

Theft and vandalism:

Most analysts pointed out that theft and vandalism is the biggest challenge of this public bike sharing system. Some analysts said that most public bicycle programs failed because no sooner were they launched than they became subject to vandalism such as smashing, theft et. It was widely reported that the velib system in Paris, which was hailed as a very innovative bike system, had suffered heavily at the hands of the users and vandals. out of the total fleet of 20,000 bicycles, 7,800 had disappeared and 11,600 had been vandalized.

Unavailability:

The bike system was only operational for seven months in the year. Due to winter they were unable to operate the bike systems.

Unsuitability:

The bike system was applicable only to single people and was not applicable for a family going out or for older people, who would find it risky and tiring.

Insufficient dock stations and bikes:

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The system had to ensure that there were enough empty docks available for the people to put back the bikes. “Sometimes you come to a stand and found all the bikes are taken, or all the rows are full so you can’t drop it back” [1] .

Misuse of bikes:

As the bike is free for first half an hour, peoples are very clever what they do is they take a bike, ride it for 20-25 minutes then put it back to any dock station for 5-7minutes and again its free for next half an hour.

Though analysts pointed out those above challenges/changes, other challenges and changes could include:

The bike sharing system could be misused. For example, teenagers could hire bikes, do skating and dock it back with few broken or damaged parts.

The economy could change.

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They might lose their bike rider in terms of low supply-high demand as people are getting interested of biking more and more.

People might decide it’s not trendy or fashionable to ride bike any more. They might feel; let’s go for something else such as motor bike.

The tourism could collapse.

The city might be over crowded if they increase the volume of bike based on high demand unless the bike lanes are not separated completely from general public transport lanes.

Some kind societal change might come which might affect on people’s lifestyles, willingness, attitudes etc.

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The next generation’s bike sharing system might change. For example, “It could be improved efficiency, sustainability, usability, business models, tracking, powering of stations, offering pedalec (pedal assistance) bikes, installation systems etc” [2] (Journal of Public Transportation, Vol. 12, No. 4, 2009).

The system might be misused by tourists when people come to visit Montreal city. For example, a tourist might hire a bike and ride it for all day long and leave it anywhere in the city and go back to their country.

SWOT analysis (it can be found in appendix 1) for Bixi bike in terms of their current situation, some of the possible suggestions to deal with such challenges and for related decision making and for operational changes:

They should have effective management and distribution team who will make sure that if any dock station gets run out or over loaded of bikes where most people hire the bikes from and return around the city.

They may have some specialised vehicle to carry out or transfer the bikes from one station to another station.

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They may implement some student discount to encourage young people because they are the main segment for this innovative bike sharing system.

They should have private-public partnership for better control and effective service.

Public transportation should be reduced in Montreal city so that peoples are needed to be used bikes. It’s a kind of pulling strategy to gently force the people to ride the bike.

Baby seated bikes (with safety belts) could be implemented for those peoples who travel with their kids.

They should take older people into their consideration by making some electrical chargeable bikes which doesn’t have any affect in environment.

They should have some policies especially for tourists so that they can’t misuse the systems.

Though they are using RFID system to track their bikes where ever it is but they should keep updated with new technologies for better security and innovation.

Pedestrians, cyclists, car drivers and other public transport drivers should have mutual respects and understanding to each other. If they have so there will not be any accident or collusion in the city [3] .

To reduce the accident or any other collusion in the city they should have particular bike lanes and paths for safe and comfortable biking [4] .

Distribution of bikes must be improved to make this service more efficient because moving bikes from high supply/low demand to areas of low supply/high demand is time consuming, expensive and polluting. [5] 

Andre Lavallee, the Montreal executive committee member responsible for the bicycle project, said, “We have to expect a certain level of theft and vandalism, but the design we have chosen will address the issue of security to a great extent. We can’t do too much about vandalism, but we are optimistic Montrealers will think of this as their property and respect it”

Conclusion:

There are weaknesses as well as strengths in this Bixi bike sharing system. The bike authority should ensure that the key challenges are addressed in a way so that threats are not posed for the Bixi bike in the long run.

Appendix – 1

SWOT Analysis of Bixi, Montreal’s innovative public bike system:

Strengths:

The idea of Bixi bike is innovative.

Non pollution emitting bike.

Proficient in applying cutting-edge technology to check street vandalism.

Efficient in using renewable energy for their operation.

Weaknesses:

Customer service is not commensurate with public demand.

Not suitable for large family members travelling together.

Limited supply of bikes in operation.

Not suitable for commercial purpose.

Opportunities:

This innovative idea is pulling people to use the bike more and more.

The bike is accepted as an environment friendly because it doesn’t pollute the environment.

Due to technological improvement they are able to act against street vandalism or theft.

As they are success in their operation, several cities are requesting for this innovative bike sharing system to run in their own territory.

Threats:

People might think about alternative transportation because supply of the bike doesn’t full fill customer’s demand. Though it is non-profitable organization.

They might lose their group people’s segment because it is absolutely not suitable for those who come out home with a group.

Theft and vandalism is the big issue for them.

Distribution of bikes from high supply/low demand areas to high demand/low supply is cause of pollution.

People (basically teenagers) misuse the bike. For example, skating.

Weather is the big challenge. For example, they can’t operate the system for 5 months in a year because of winter season.

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