Bolloré Group Awarded Compensation for Autolib’ Shutdown
Paris, February 22, 2023 – The Bolloré Group has been granted €66 million in compensation by the Paris region municipalities that operated the Autolib’ car-sharing service. The decision was made by the Paris Administrative Court of Appeal on Friday, February 21.
Autolib’ had sought damages for losses incurred due to the termination of its contract in 2018 by the Autolib’ Vélib’ Métropole (SMAVM) joint syndicate.
Launched in 2011, Autolib’ was initially projected to generate annual profits of at least €56 million with thousands of small, electric Bluecar vehicles deployed across the Ile-de-France region. However, the Bolloré Group soon reported a small deficit, which later escalated significantly despite having 150,000 subscribers.
In 2018, Autolib’ notified the joint syndicate of the concession’s lack of economic viability and demanded financial compensation of €233.7 million. The joint syndicate refused and terminated the contract on June 25, 2018. The Bolloré Group then filed a lawsuit, claiming €235 million in damages, but lost the initial trial in 2023.
On Friday, the Court of Appeal ruled in favor of the Bolloré Group, confirming that clauses in the Autolib’ contract stipulated that SMAVM would cover operating losses exceeding €60 million.
The court noted that "Autolib’s shortcomings were not the cause of the concession’s lack of economic viability, which was mainly due to overly optimistic revenue forecasts at its launch." However, it also found that "both Autolib’ and SMAVM were slow to react to the concession’s difficulties."
Specifically, the court determined that Autolib’ should have declared the economic viability deficit by November 30, 2013 at the latest. This would have allowed the concession to be terminated and "expenses halted" on December 31, 2013.
As a result, the court ruled that Autolib’ could only claim compensation for the deficit exceeding €60 million up to the end of 2013.
SMAVM will therefore be required to pay, including interest:
- €44.9 million for compensation of losses
- €13 million for vehicle charging stations
- €8.2 million for the costs of terminating contracts for leases and with suppliers
Analysis
The Court of Appeal’s decision underscores the importance of realistic revenue projections and prompt action when addressing financial challenges in public-private partnerships.
The ruling also raises questions about the transparency of Autolib’s financial reporting and the oversight role of SMAVM. The fact that the deficit escalated significantly over time suggests that there may have been a failure on both sides to adequately monitor the project’s financial performance.
The compensation awarded to Bolloré may ease the financial burden on the company but does not fully offset the losses incurred during the Autolib’ project. It remains a cautionary tale for both private sector investors and public entities considering similar initiatives.
