Tartu bikeshare system at risk as Canadian firm faces financial issues
Tartu's Smart Bike Share service is facing the threat of disruption due to the Canadian company responsible for providing the service encountering financial difficulties. Bewegen Technologies is currently undergoing a reorganization and is demanding hundreds of thousands of euros in additional funds from the City of Tartu to keep the bike service running.
The people of Tartu have ridden a total of almost 9 million kilometers on rental bike since they were introduced in the city in 2019. That's the equivalent of more than two hundred times around the world or around a dozen trips to the moon and back. Now however, almost five weeks after Tartu's city bikes have returned to the streets following the winter break, the system is threatening to shut down.
In March, Tartu City Council received a report that Canadian company Bewegen Technologies, which supplies the smart bike share service, was facing serious financial difficulties. According to Tartu Deputy Mayor Raimond Tamm, Bewegen is currently undergoing a reorganization process in Canada process, which it has until August to complete.
"Bewegen is trying to restructure itself. It is trying to get to the point where it can continue to operate," said Tamm. "They have been gradually changing their service contracts with different clients. Because of this, we have also made a statement to the press on our part so that, as the company's behavior may, at some point, be unpredictable and so all users are aware that there is this kind of risk," said Tamm.
The City of Tartu has spent around €4 million on the Smart Bike Share scheme since 2018, half of which has been provided from external funders. The nearly 800 bikes and 94 parking bays now in use this have all been bought by the city from Bewegen. However, without the company's technical support, it may no longer be possible to keep the bikes in operation.
As Tamm explained, that the entire Tartu Smart Bike Share management system, which includes the software, enabling people to rent the bikes as well as organize their movement around the city, is crucial.
"This came to the city as part of the hardware purchase under our current contract today. However, Bewegen has said that we can't go ahead in this way. They want to terminate the contract with the city," said Tamm.
The move also appears to demonstrate the way the company is attempting to get its finances in order.
Bewegen has now proposed that the City of Tartu starts paying hundreds of thousands of euros a year for a management system for which, according to the current contract, it has been paying nothing.
"To put it another way, there is no guarantee for the city. If, for example, they try to reach an agreement with Tartu, but no one else accepts the offer in this form, then there is still a major question mark regarding the sustainability of the company," Tamm said.
Tartu is Bewegen's biggest customer, as it was when the scheme began five years ago. According to Raimond Tamm, there are currently reports, that in one U.S. city, where Bewegen stopped providing its services, the bike wheels were brought to a standstill. However, Tamm admitted that Tartu cannot accept the Canadian company's proposal to change the contract.
"We have a procurement contract and we simply cannot make any other kind of deal that changes things. Because, in such an eventuality, those agreements would not be in line with the law," Tamm explained.
In the event Bewegen pulls the plug on its deal with Tartu, the city's entire Smart Bike Share system will grind to a halt. Tartu is now looking for ways to keep things going. The first major question concerns the software, though after consulting with a number of different parties, city officials believe that, in this regard, a new solution is possible. When it comes to spare parts however, the situation is more complicated. Not only are there a limited number of spare parts available for the current fleet of bikes, but finding an alternative provider of spare parts is also challenging.
According to Raimond Tamm, the city is working hard to ensure that the bike-sharing service continues to operate despite all the issues.
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Editor: Michael Cole