Co-operative Auto Network (CAN)

Case Study

Prepared for
The Co-operatives Secretariat
AAFC

Prepared by
New Economy Development Group

February 21, 2006

The Co-operative Auto Network
- A transportation solution for people and the planet -

Summary

The Co-operative Auto Network (CAN) began in Vancouver in 1996, with the aim to promote car sharing as an environmentally responsible alternative to personal vehicle ownership. It has since grown to become one of North America's largest car-sharing organizations. CAN now serves more than 2,000 members, with over 110 shared vehicles (as of November 2005) located in neighbourhoods throughout Vancouver, the lower mainland and Vancouver Island area. Members pay to join the co-op, and they can use a co-op vehicle when they need it on a fee-for-use basis. All insurance, maintenance and fuel costs are covered, and members have access to hatchbacks, sedans, minivans and pickup trucks, depending on their needs at a given time. Co-op members can also exercise their rights of shared ownership and democratic decision making by voting in the election of the board of directors of this not-for-profit co-op.

CAN has 40-50 new members joining each month, and the larger it becomes the more attractive it is to new members, since it can provide more cars in more locations, better prices, and other benefits to members. CAN Membership has grown steadily since it was incorporated in 1996. It has been financially self-sufficient since reaching 500 members in July 2000, and debt-free since reaching 1200 members in May 2003.

CAN has also taken many pro-active measures to promote environmental responsibility and to reduce the number of cars in the Vancouver area. Its fleet of cars includes hybrid vehicles. It recently initiated a car-sharing pilot project for Whistler residents, and it has a cross-use agreement with the Victoria Car Share Co-op. It provides added benefits for its members, such as discounts on health programs and other local means of transportation. It has collaborated with the developer of "Electric Avenue" in Vancouver to make car-sharing available for the first time in North America to the tenants of a new residential development. And CAN was instrumental in the creation of a City of Vancouver By-law allowing developers to reduce their parking ratios if car sharing was incorporated within the building specifications. This enacted legislation is the first of its kind in the world.

This detailed case study looks at the evolution of the car-sharing concept, and it traces CAN's development from start-up through its various growth stages, and documents the lessons learned along the way.


Acronyms

AGM - Annual General Meeting
AWARE - Association of Whistler Area Residents for the Environment
B.C. - Province of British Columbia
CAN - The Co-operative Auto Network
CCS - TransLink Commuter Car Share Program
CED - Community Economic Development
CSO - Car Sharing Organization
EC - Environment Canada
ED - Executive Director
GVRD - Greater Vancouver Regional District
ICBC - Insurance Corporation of British Columbia
SFU - Simon Fraser University
TransLink - Greater Vancouver Transportation Authority


Table of Contents


1. Introduction

The Co-operative Auto Network

The Co-operative Auto Network (CAN) is a non-profit co-operative which promotes car-sharing as an environmentally responsible transportation option. As of November, 2005 the co-op had 113 vehicles located at various sites in Vancouver and more than 2,000 members. The owners of the service are the members; members control, through an open and democratic forum, the scope and direction of the co-op. The Co-operative Auto Network was identified as an important co-operative to complete a case study on as it encourages community solutions to environmental challenges (a key priority area in this series of case studies), and has had significant success in doing so.

Among the reasons that CAN was identified as an important co-operative to complete a case study on are that:

  • CAN encourages community solutions to environmental challenges.

  • This co-op provides lessons to share because:
    1) CAN was the first successful English speaking car sharing co-operative, and the second oldest, in North America; and,
    2) it has an expanding network of services for its members with other car-share co-ops and local organizations.

  • CAN has been innovative in the following ways, among others:
    1) it supports its commitment to sound environmental practices through the purchase of hybrid vehicles as part of its fleet of cars;
    2) it has recently initiated a car-sharing pilot project for Whistler residents and a cross-use agreement with the Victoria Car Share Co-op;
    3) it provides members with added value through discounts to services such as health programs and other local means of transportation;
    4) it has collaborated with the developer of "Electric Avenue" in Vancouver to make car-sharing available for the first time in North America to the residents and tenants of a new residential development; and,
    5) CAN was instrumental in shaping policy in the creation of a City of Vancouver By-law allowing developers to reduce their parking ratios if car sharing was incorporated within the building specifications. This enacted legislation is the first of its kind in the world.

1.1 Methodology

To complete this case study, documents on CAN provided both by the co-operative and obtained externally were reviewed related to the growth and evolution of CAN. Interviews were also carried out with individuals internal and external to CAN in order to review the establishment and evolution of the co-operative and to solicit their ideas on the future challenges and opportunities for the co-operative. Interviews were conducted with two individuals from CAN (the Executive Director, and the Co-Chair of the Board of Directors); a representative of Vancity Credit Union (a key supporting organization in the establishment and on-going growth of CAN); and, a representative from the City of Vancouver Transportation Engineering Department. A draft of the report was provided to the co-operative to review and comment on before the case study was completed.


2. Background

CAN was officially incorporated on May 7, 1996 under the Co-operative Association Act of British Columbia to promote car sharing as an environmentally responsible alternative to personal vehicle ownership, and has since grown to become one of North America's largest car sharing organizations. It is a not-for-profit co-operative that promotes car sharing as an economically beneficial and environmentally responsible transportation option to private car ownership. It fosters community-based transportation decision making which recognizes the environmental, economic and social integrity of neighbourhoods and the planet.Footnote 1

2.1 CAN at Present

CAN currently (as of November 2005) provides more than 2,000 members with access to over 113 vehicles (approximately 19 members per vehicle) located in neighbourhoods throughout Vancouver, Burnaby, North Vancouver, New Westminster, Whistler, Nanaimo, Courtenay, Tofino and Cortes Island, and has on the order of 40-50 new members joining each month. The vehicles that CAN provides to its members range from hatchbacks up through sedans, minivans, and even pickup trucks. CAN's members have sharing arrangements with a car share co-op in Victoria also.Footnote 2,Footnote 3 Please see Figure 1 below for locations of CAN's vehicles in the City of Vancouver as of September 2005.

Car sharing groups need size, since the bigger the group, with more cars in more locations, the more attractive it is to its members.Footnote 4 CAN Membership has grown steadily since it was incorporated in 1996. It has been financially self-sufficient since reaching 500 members in July 2000 and debt-free since reaching 1200 members in May 2003.

As both a transportation provider and an environmental organization, CAN actively promotes car sharing as an environmentally responsible and economically sound choice for many people's travel needs. Through car sharing, the Greater Vancouver Regional District (GVRD) government has identified that CAN members:

  • Reduce the number of private automobiles on the road.
  • Improve the local air quality and reduce greenhouse gas emissions.
  • Promote a less car dependent community.Footnote 5

Please also see Section 4.6 below for descriptions of other significant contributions to the community.

2.2 Car Sharing Concept

The idea of car sharing was developed primarily in Europe where over 200,000 people in 350 cities across the continent are part of car sharing organizations. Globally, car sharing is currently available in over 600 cities around the world.Footnote 6

North America
In North America, there are car share groups in 50 towns and cities, most which have started since 2000. Most of the larger groups have doubled their membership in the period 2002-2004, and appear to be expanding at an average growth rate of 50% per year.Footnote 7 Several car sharing organizations exist in Canada. CAN along with Communauto in Quebec are currently the two largest. Both organizations foster car sharing as an alternative to the privately-owned automobile by providing shared vehicles for occasional trips on a fee-for-service base.Footnote 8

Box 1: Car Sharing
Car sharing is an alternative system of car ownership, access and use where vehicles are shared amongst a group of individuals on a fee-for-use basis. With car sharing, the cost and troubles of vehicle purchase, ownership and maintenance, insurance and gas are transferred to a central organization whose members are provided access to the shared vehicles which are parked in central locations throughout a city for hourly or daily sue. Members pay for the time and kilometres they drive in addition to an annual access fee. It represents an environmentally responsible and economically sound choice for many people's travel needs, particularly for those occasional errands that demand the use of a vehicle, leisure trips and some work-related trips. "A lot of people hear car sharing and they think car pooling. But this isn't what we do. We're a fleet of cars that are shared among members," says Tracey Axelsson, CAN's Executive Director.

Ref.: 1) Car Sharing in Canada: Making More Sustainable Personal Travel Choices. [Author unknown]. [Date unknown]
2) British Columbia: Co-operative Auto Networks Pod Development Project. Environment Canada EcoAction. Last update: 2003-01-30


Policy Context of Car Sharing
Vancouver is a rapidly growing city on Canada's west coast, where the car population is growing at almost twice the rate of the human population, and where the resulting volume of cars is causing increasing congestion, pollution, frustration, stress, and economic loss, as in many cities in Canada and around the world. Numerous studies by provincial, regional and municipal agencies in the Greater Vancouver area indicate that not only is traffic congestion getting worse, but so too are the health and environmental problems associated with automobile emissions, including declining air quality and increasing rates of respiratory and cardiovascular illnesses. Footnote 9, Footnote 10

Car sharing has been a good fit within the "green" culture of Vancouver, which has in turn contributed significantly to the establishment of the Co-operative Auto Network. B.C. leads the country in the creation of green businesses - operations that are geared to making money but have an environmental, sustainable, or socially responsible bent;Footnote 11 and North America's first Green Party was established in B.C. in 1983. Car sharing has been a good idea at the right time in Vancouver that has had "legs".

Provincially, the British Columbia government has committed itself to reducing greenhouse gas emissions from both public and private sources. The province does not yet, however, have any policies in place that directly support car sharing.Footnote 12

Nationally, Canada is committed to reducing greenhouse gas emissions (GHG) by 6 percent below 1990 levels between 2008 and 2012. Although many corresponding actions and policies have yet to be worked out, personal transportation is emerging as a logical focus given the fact that private cars and light trucks are responsible for 15% of Canada's total GHG emissions.Footnote 13 The federal government does not yet, however, have any policies in place that directly support car sharing.

2.3 CAN's Goals

CAN's main goals are:

  • To reduce the impact of automobiles on urban ecosystems by offering car-sharing as an alternative to individual car ownership. With less automobiles on the road CAN hopes:
    1. To reduce the human contribution to greenhouse gas emissions.
    2. To improve local air quality through decreasing the amount of pollutants released.
    3. To indirectly promote pedestrian, bicycle and transit friendly urban design.

  • To ensure that, in the process of providing a car-sharing environment, CAN is:
    1. More affordable than a personal vehicle.
    2. Accessible to those who cannot and/or prefer not to own a personal vehicle.Footnote 14

Box 2: Providing a Practical Alternative to Car Ownership
CAN's intent is to open the door to practical alternatives to car ownership and overuse. We recognize that alternatives to cars do not meet every transportation need for many people. We also recognize that once buyers have invested in a vehicle, they usually feel compelled to use it, most probably at the exclusion of alternatives. Under the typical economic assumptions, using the car for every transport need becomes the economically-reinforced norm rather than the mode of last resort. With car sharing we reverse this economic argument. CAN makes it cheap to "purchase" a nice-looking car which is convenient and maintenance free. Then we make every kilometre driven and every hour used have a cost. This works to limit kilometres travelled and completely eliminate many trips.

Ref.: Car Sharing: How it Works in Vancouver, Canada. T. Axelsson. 1999


2.4 CAN Membership

Members have joined CAN for a number of reasons, some because they wish to save money on their transportation and others to lessen their impact on the environment.Footnote 15 A 2001 membership survey identified that reasons of cost ("CAN is less expensive than buying or leasing a vehicle") and environmental concerns were an important, or very important concern, of 95% and 92% of members, respectfully.Footnote 16 Among other reasons that CAN membership was very important, or important, to the members surveyed were:

  • "Convenience - I don't have to spend time or money on maintenance" (90%).
  • "I like the co-operative structure of CAN" (75%).
  • "I wanted access to a variety of vehicles" (44%).
  • "I wanted access to a second car" (10%).

Many of the new members sell their cars or give them to British Columbia's "Scrap It" program which recycles older, inefficient vehicles.

Make-up of CAN Membership
Of the members who answered the 2001 membership survey, 48 (13%) of them have children under the age of 18 who live in their household, and 74% were between the ages of 25 and 44. At the time of the survey in 2001 only 14% of the 370 members surveyed (55% of the members responded) had access to personal motorised vehicles, meaning that the majority of CAN members used alternative ways of getting around including: transit, walking, bike, and rental vehicles.Footnote 17

Economic Participation of the Membership
Members purchase a one time refundable share of $500 to join CAN, and a $20 non-refundable Registration Fee is also collected to pay for a member binder, a lockbox key and a credit check. In addition, members pay a small monthly administration fee to cover some of the fixed costs of the car, and low hourly and per kilometre usage fees set up in a variety of plans designed to meet the needs of members. Typically, plans are built around low usage (driving less than 87 km per month), medium and high usage (driving more than 87 km per month). The average monthly payments are $117 a month, as compared to the estimated average cost of a vehicle driven in the Lower Mainland of B.C. of $400 a month for privately operated cars.Footnote 18

Joining CAN involves members going through an hour and a half long orientation process, signing the CAN Membership Application, and purchasing shares in the co operative. If a member ever leaves the co-op they will receive 100% of their share purchase back (unless they have unsettled expenses or invoices).

To foster a stable membership base, potential members must be prepared to join for at least 6 months. In keeping with CAN's not-for-profit status, they do not issue dividends on the share, nor does the membership share accrue interest. The share purchase is also an investment in a relatively new co-operative - an investment CAN points out that members should be prepared to lose a portion of if the enterprise were ever to fold, though CAN's financial situation has been strong.Footnote 19

CAN Membership Benefits
Additional current benefits for members of CAN include:

  • CAN cars are permitted to park in any Permit Zone in Vancouver. Members of CAN are also entitled to use car share parking spaces at a growing number of SkyTrain stations.Footnote 20
  • Members do not pay for vehicle maintenance or gas; amounts paid by members to fill up cars are credited on their monthly bills.
  • All insurance, cleaning, maintenance, BCAA Membership, plus permanent and permit parking are included in the rate plans.Footnote 21
  • CAN cars are insured for both work and pleasure use with the co-op holding the insurance under a fleet plan option.Footnote 22 As with privately owned vehicles, car costs can be claimed as business expenses when the vehicle is used for work purposes.
  • Car reservations can either be made over CAN's unique internet based reservation system, or over the phone.
  • CAN cars can be booked by the hour - even by the half-hour - or for longer periods, as needed. Vehicles are conveniently located near members in their neighbourhoods. Once the vehicle is booked, members pick up the designated car and drop it off at the same location at the agreed time. Member fill out a mileage log recording the distance traveled during their trip. At the end of the month, an itemized bill is mailed to them.
  • Sometimes renting a car can be more cost-effective than CAN for longer trips; CAN provides a "CAN vs. Rental Car Calculator" on their website for its members and the public to compare these costs.

The ratio of members to cars is approximately 19-20 members to one vehicle for CAN. Although access to vehicles is not guaranteed, particularly during busier weekends and peak summer months, with advance booking members are virtually assured of having a vehicle when they require one. CAN makes thousands of bookings every month and log about 5% as many requests where the cars are not available. These are typically last minute bookings where only the nearest cars will do. If given at least 2 days notice, CAN will typically have a car available.Footnote 23 CAN members are able to book a variety of vehicles depending upon their needs, including compact cars, trucks, minivans, station wagons and hybrid vehicles.Footnote 24

Membership Satisfaction
In the 2001 membership survey completed by CAN 95% of the members surveyed were very satisfied or satisfied with the overall service CAN provided. Ninety-four percent (94%) of members thought CAN was beneficial for the environment.Footnote 25

What members identified as liking most about in CAN in the 2001 survey were:Footnote 26

  • The convenience, freedom and flexibility.
  • The convenient locations and accessibility of cars.
  • The simple and well-organized structure.
  • The friendly, courteous and efficient manner of CAN staff.

What members liked least about CAN were:Footnote 27

  • The conduct of other members, especially when vehicles are left dirty or with unappealing odours.
  • The lack of spontaneity.
  • The absence of vehicles in certain parts of Greater Vancouver.
  • The times when vehicles are not available.

Members who did have questions or concerns were very satisfied or satisfied that they were: promptly addressed (83%), handled in a professional manner (84%), or resolved to their satisfaction (77%). Ninety-nine percent (99%) of members would recommend CAN to others and fifty-three percent (53%) heard about CAN from a friend, relative or business associate.Footnote 28

A key indicator of the satisfaction of the membership with the co-operative is that not many people have joined and then left; keeping the members happy has been a key factor for success for CAN.

Membership Involvement
There has been a lot of volunteer contribution from the membership, particularly in the early stages. In the beginning of CAN the members were doing everything: doing sign-ins; orientation sessions for new members, etc. Every member had something to do.

Start-up

2.5 Founding of CAN

The Co-operative Auto Network was created in 1996 by Community Economic Development (CED) practitioners in Vancouver with a keen interest in the environmental, social, and economic sustainability of the region.Footnote 29 The key founding member of the organization was Tracey Axelsson, the current Executive Director of the Co-operative Auto Network, who started CAN out of her CED studies at Simon Fraser University (SFU).Footnote 30

Tracey Axelsson and her husband had taken their car off the road in the mid-1990's, and then found they didn't need a car. At this point they then started looking at their transportation options and saw a short CNN video clip on car sharing in Cologne, Germany. Tracey was also looking for a topic for her thesis at SFU, and decided to do it on a car sharing co-op. Tracey was at the same time working at the Fraser Basin Council, who supported her work in starting CAN and facilitated her meeting a number of people who would be useful in establishing CAN, including potential volunteers.

Tracey completed an initial marketing study in the city through a questionnaire before the organization started, asking people if they were interested in car sharing. At CAN's "launch" the six founding members called up those people who had left their names with them and sixteen showed up. Other people in Vancouver were at the same time also thinking about setting up a car sharing coop which gave the founding members of CAN hope.

2.6 Evaluating the Co-operative Model and Variations

Initial Thinking
For the six founding members of CAN, they appreciated that incorporation as a co-op was the first step in a long road. They were also strongly aware that getting off to the right start for the group was going to get them there faster.

The six founding members consisted of a community economic development graduate, an engineer, travel agent (reservation system expert), environmental lawyer, enviro-business professional, and a business coach. Initially, the six discussed frankly what they each hoped to achieve from the creation of CAN, and then looked into the various structures (e.g., for-profit corporation, non profit organization, or a co-operative) available. Building from this framework they considered each designation in all of its practical and ideological details, looked at what CAN's goals would be, and really thought about which corporate form would be best for this car sharing organization.Footnote 31

Evaluating Organizational AlternativesFootnote 32
For the founding members the for-profit corporation had the advantage that they would be permitted to raise capital in a variety of ways both public and private. They knew that for start-up organizations with individuals with no previous financial history, finding bank financing may be a challenge but ought not to be impossible.

CAN also appreciated that non-profit organizations tend to be held by a society that performs public education and/or charitable works. While these organizations can generate income from products and services, they often rely on sponsorships, subscriptions, grants or donations. They are limited in their ability to hold assets from fiscal year to year but that having a society through which the Car Sharing Organization (CSO) applies for grants is an effective use of this corporate form.

Advantages that CAN saw in adopting the co-operative structure included:

  • Accountability and transparency in financial matters: In a co-operative elected Boards can be removed and co-operatives must be audited each year.
  • Managing the members financial contributions: The management of this money in a co-operative structure is not complicated, as compared to for-profit organizations, as the shares are investments in the co-operative and their use is stipulated in the Rules of Incorporation.Footnote 33

The risks of adopting the co-operative structure identified by CAN include that a rogue Board will decide that it can run things more efficiently without the initiator(s) and removes them: "This is both terrifying and possible in a co-operative structure."Footnote 34 This is an issue that all cooperatives must consider.

Further Thoughts on the Legal Structure Used
Each of the alternative legal structures that can be used to establish a car-sharing organisation (e.g., incorporation as a for-profit, non-profit, or co-operative organization) has its advantages and disadvantages. As the Executive Director of CAN, and a key founding member, has said:

"So - for-profit, non-profit, or co-op? Well really a mix would be great and embrace all the positives while reducing the negatives. The Co-operative membership owns the cars and has an iron-clad contract with a for-profit management company to provide administration, billing, maintenance and advertising. Meanwhile a non-profit group seeks grant financing to do the environmental out-reach work (communications) and education of what is involved in car sharing. It's too late for CAN to be set up this way but ...hopefully others can benefit from our mis-steps!"Footnote 35 (Please see examples of the challenges encountered in Section 4.7 below).

2.7 Financial Support

When CAN was founded in 1997, it received start-up support from Vancity Savings Credit Union, and The Co-operators, a major Canadian co-operatively owned insurance company. Managers at Co-operators and Vancity were supportive of the car sharing concept and they provided a $20,000 grant from Vancity and a $20,000 grant from Co-operators to get CAN started. An additional $46,000 financing (provided as personal loans that were signed by three of the founding members: Tracey Axelsson, her husband and Kevin McLaughlin) was also provided by Vancity to buy cars.

The initial start-up costs were relatively low (approximately $42,000 in grants, and an additional personal loan for $46,000) but without this money CAN would not have been able to get started. With this money, Tracey was able to work full time on developing CAN and, for the first three years, she ran CAN from 500 square feet of her apartment.

Ultimately CAN had loans of totalling $110,000 and a total grant input of near $100,000, and CAN generated the rest of the money through their revenues.Footnote 36 On April 30, 2001 CAN, after approximately four and a half years of operation, made its final loan payment and became a debt-free, self-sustaining organization.Footnote 37

2.8 Targeted Groups/Beneficiaries

When first founded in 1997, CAN specifically set out to serve the West End neighbourhood of Vancouver (the area located immediately below Stanley Park on Figure 1 above). The area is considered one of the most liveable downtown neighbourhoods in North America, but it is also one of the most densely populated areas in North America and is continuing to grow. The West End has poor parking conditions, and the encroachment of parking lots was a major concern. By reducing the number of cars required by its residents, CAN hoped to contribute to maintaining the area as great place to live for anyone.Footnote 38

Early Promotional and Marketing EffortsFootnote 39
In 1998 CAN obtained Environment Canada Eco-Action project funding to increase its membership and the public awareness of car sharing. The promotional effort focused on ten neighbourhoods that formed concentric rings around the areas that had the greatest number of CAN members. This strategy was taken to foster the development of "pods", areas in which there are enough members to warrant centrally parking a vehicle. The promotion used direct marketing techniques in areas with high vehicle usage, such as shopping mall parking lots, where CAN distributed leaflets on parked cars promoting a better way to get the groceries home. CAN staff had considerable success by making presentations to the staff of businesses (including grocery stores and all four branches of the Vancouver City Credit Union) so that they could, in turn, spread the word about CAN to their customers. For a small organization at that time, CAN did find the reporting requirements for the grant burdensome and only used half of the monies available.

It has been estimated that the promotional campaign contributed to 330 new memberships over a one year period. CAN estimates that this represented a yearly reduction of approximately 32,000 litres of gasoline, and 400 tonnes of greenhouse gases.

Growth

2.9 Growth and Evolution

CAN has grown from six members and a Pontiac Firefly in January, 1997Footnote 40 to an impressive 2000 plus members and 113 vehicles in November 2005 (please see Table 1 below). There are enough CAN cars now located in certain areas of Vancouver (such as the West End, Kitsilano and Commercial Drive) that most co-op members are now within a short walk to at least five different vehicles.Footnote 41

Table 1: Brief Chronology of the Growth of CAN, including several key milestones

1996: CAN formally incorporated in Vancouver, British Columbia
1997 (January): CAN physically launched: 1 car; 16 members
1999 (December): 392 members
2000 (December): 626 members
2001 (April): CAN became debt free and self-sustaining
2001: Launch of web based booking software
2004: Sales exceed $1 million in 2003/04 fiscal year for the first time
2004 (September): 1680 members; 88 cars
2005 (November): 2000+ members; 112 cars
2005: Establishment of Corp CAN Car Sharing Inc. for business car sharing
2005 (June): City of Vancouver pass new co-op car bylaw for new developments

2.10 Organizational Profile/Structure

CAN is a not-for-profit co-operative owned by its members, who own or lease the vehicles, and who control the co-op's activities and direction through a democratically-elected board of directors. CAN is also an associate member of the British Columbia Co-operative Association. As a co-operative, every member has one vote in the democratic process of electing CAN's Board of Directors.Footnote 42,Footnote 43,Footnote 44

Democratic Participation
Participation in the CAN Board of Directors election process requires that members come to the Annual General Meeting (AGM). However, of the members who answered the 2000 CAN membership survey, only twenty-six percent (26%) said that they had attended the last AGM. Twenty-five percent (25%) of those who answered said that they had "no time" to attend the meeting and thirteen percent (13%) answered that the time and/or location of the meeting was inconvenient. The 2001 CAN Social and Environmental Report of this survey recommended that in the next survey the co operative aspect of CAN should be explored and it should be determined if members feel as though they are contributing members, or if they feel that CAN functions purely as a service.Footnote 45

Board of Directors
The Board of Directors consists of six Directors who meet monthly, each elected for a period of 3 years. The Board tends to be a mixture of old and new Directors; the Directors have staggered terms so that only two Directors of the six are elected per year. The Board has also set a 7 year limit of term for Board Members so as to get new perspectives regularly put in place. CAN has provided a training workshop for the last 3 years for the new Directors dealing with, for example, Co-op principles, and this year included a session on strategic planning. The Coop Housing Federation of BC (CHFBC), a large co-operative group in B.C., helps CAN with this formalized governance training and with providing facilitators.

Changing Role of the Board
The role of the Board has been different from year to year: in the beginning the Board was very hands-on and played an important role as a "sounding" board for the Executive Director. Now it is keeping a handle on CAN's mission and its vision, and making sure that CAN is not getting hyper-extended: for example, in the last year the Board has set the geographical boundary for the car sharing operations of CAN as being the GVRD limits. The Board also keeps focus on what CAN's priorities are and what will work, while trying not to dampen the entrepreneurial spirit of the Executive Director and the senior staff.

Governance Challenges
Growth is recognized as having been both a significant leadership and governance challenge for CAN. CAN has recently passed a governance policy that clarifies the relationship between Board and staff; and it is also finding now that as an organization it needs to have policies and procedures written down as it continues to experience significant growth. The Board has played an increasingly active role in the last two years in the development and documenting of policies and procedures so as to get the organizational memory down so that it won't be lost.

Staff
The staff of CAN is currently 10, including the Executive Director, and operates out of a central office in downtown Vancouver.

Staff Education
CAN will pay for staff members to attend a course of their choice to a contribution maximum of $500 per year. The course(s) does not have to be related to the work done for CAN and is meant to support staff in furthering their personal and/or career goals.Footnote 46

Technology
Car sharing can be a simple system needing only a phone line, a piece of paper and staff committed to working all hours to meet users' needs. However, to offer a comprehensive service that operates 24 hours a day the installation of an internet based booking system is a huge improvement for staff and members, and keeps administrative costs low.Footnote 47

CAN had been working on car sharing reservation software with specific web-based applications since it was founded. The four things that CAN kept in mind as they developed their Internet booking system were: reliability; security; speed; and, expense. In a very low cost way, they succeeded in developing car sharing specific software and launching it in 2001. CAN has since made the successful transition from a combination paper-based/ computer booking systems to a secure computer and Internet based booking system.Footnote 48 This web based booking system has significantly increased staffing efficiency by reducing the need to constantly answer the phone. The change to having the system automated was apparently very dramatic.

In keeping with CAN's mission to foster car sharing, in 2005 CAN has actually launched a free on-line booking site for start-up groups to use world-wide. CAN recognizes that finding that one person whom may wish to work around the clock for the community could be a challenge, so making this system available will increase car sharing everywhere; hence the name carshareverywhere.net. 

2.11 Financial Profile

On April 30, 2001, approximately four years after having been launched in 1997, CAN made its final loan payment and became a debt-free, self-sustaining organization. Its financial situation then became very secure, and became 100% financed by member's user fees. The members' shares pay no dividends and no interest.Footnote 49 CAN is not driven by profit, and any profit that is made in a given year is invested back into CAN in the form of more vehicles, funds for outreach or updating office supplies.Footnote 50

The financial year 2003/2004 became another milestone year as CAN's total sales exceeded one million dollars. This continuing financial stability has allowed CAN to grow, to plan, to manage its ever expanding fleet, to find new car sharing ventures, and to engage new ways to serve the membership: "These accomplishments are the result of the hard work, dedication and great ideas of CAN staff over many years. Their investments of time and resources have created the business practices and technologies of CAN. Today these are showing a payoff in the co-op's performance" [CAN Annual Report 2003-2004].

On-going Vehicle Financing
Taking the organization to the next level of operation after 2-3 years (approximately 1999) took a new level of financing (e.g., to finance the next set of cars). The leasing of cars solved this at that time. CAN has gone from buying to leasing and now back to buying with approximately 20% of the cars now leased and 80% owned by CAN.

In December 2005, CAN secured a revolving line of credit with VanCity Capital Corporation for $500,000 at a favourable interest rate. With this access to financing, CAN sees growth as limitless.

2.12 Continued Promotional Efforts

CAN's growth over the years has primarily been stimulated by word-of-mouth and free newspaper stories and advertisements, which create public awareness that car-sharing and CAN exist as a viable transportation option: for example, TransLink (the Greater Vancouver Regional Transportation Authority) put free ads on their buses which gave information even faster to potential CAN members. Through word-of-mouth, the members themselves have played perhaps the most critical role in promoting the car-sharing concept and CAN.

2.13 Successful Partnerships

CAN has initiated and developed many successful partnerships since its founding in 1997 with co-operatives, various levels of governments (primarily municipal), transportation authorities, and the private sector. For example:

  • Co-operation among co-operatives. Strategic alliances with Vancity Credit Union (a co-op and the largest credit union in terms of dollars in Canada) and Vancity Capital Corporation (a subsidiary of Vancity), which both have provided loans to start and expand CAN's fleet. CAN also had the very important support of the Co operator's (one of the largest insurance groups in Canada) in getting started. CAN also has a cross-use agreement with the Victoria Car Sharing Co-operative so that CAN members can use cars in Victoria and vice-versa. The Co-op Housing Federation of BC has provided governance and strategic planning training as well to the CAN Board of Directors.

Box 3: Providing More than Money
CAN is a good fit with the values of Vancity (community organization, mitigating environmental impacts, etc.), and Vancity has provided a combination of grants and loan capital to CAN both when it was starting up and for continuing operations. Vancity is also now considering the establishment of a future revolving credit facility for CAN to provide them with a more flexible arrangement to allow CAN to buy a car when it is needed.

But Vancity has been providing more than money: example, technical assistance and contacts in the community. For example, when CAN wanted to do a social audit, Vancity provided staff and feedback and advice. Vancity also hooked CAN up with someone with financial systems knowledge to help them out.

  • Partnership with the City of Vancouver which allows CAN cars to park in any 'permit only' areas and has begun to provide special CAN-car only parking stalls on streets in Vancouver's more densely populated downtown neighbourhoods. The City also became one of the first corporate members of CAN before the idea of a corporate member was generally taken up.Footnote 51
  • Regional Transportation Authority: TransLink, Greater Vancouver's Regional Transportation Authority, has supported CAN through the provision of designated parking stalls at select stations along Greater Vancouver's overhead light rapid transit line, the SkyTrain. CAN members are also eligible for the Employer Pass Program, which provides a 15% discount off monthly FareCards.
    • In 2003, the Co-operative received $50,000 grant from TransLink for the 18 month Commuter Car Share pilot project with TransLink, where commuters combined the use of a CAN vehicle with the SkyTrain. The purpose of the project was to explore the feasibility of a car-sharing program designed specifically for commuters who live and work within walking distance of a high quality system, but commute to a location that requires driving.Footnote 52 When launched in January 2004 this program was the first of its kind in Canada. Home-end users used a CAN vehicle to get to a SkyTrain station, and left it there for others to use, while work-end users picked up a CAN vehicle when they got off the SkyTrain, and used it to get to work.Footnote 53
    • In 2004 the Commuter Car Share (CCS) Program was estimated to cost $225 per month, which included use of a CAN vehicle, a one-zone transit pass, insurance, roadside assistance, maintenance and gas. Compared to driving their own vehicle to work each day, it was estimated that commuters who used this program could save $5,000 or more annually.Footnote 54

Box 4: Reducing the Stress of the Daily Commute
Besides the cost savings and the environmental benefits, Commuter Car Share Program users appreciated the reduced stress of their daily commute. "Instead of sitting in my car in traffic, I enjoy reading a book during the 20-minute ride on Sky Train before I pick up my car at Scott Road Station," said Audrey, a resident of Cloverdale who signed up with CCS.

Ref.: Reduce Your Car Expenses Through Car Sharing. Greater Vancouver Transportation Authority (TransLink) News Release. http://www.translink.bc.ca/About_TransLink/News_Releases/news03080401.asp March 8, 2004.

  • Business alliance with Discount Car Rentals, Dollar/Thrifty Rentals and Enterprise: CAN members get a discount on most rentals at four locations for members going on longer trips and vacations, or who want a larger, cargo vehicle.
  • Whistler Resort: With support from the Resort Municipality of Whistler, AWARE, and the Whistler Housing Authority, CAN initiated a car-sharing pilot project for Whistler residents in 2004. This is an innovative arrangement that will position CAN well when Whistler is an active Olympic site in 2010.
  • YWCA: CAN is enrolled in the YWCA's Workplace Wellness program, which gives CAN members a discount on memberships.

Recognition of CAN
CAN and its staff have gained significant recognition and been given important awards since its founding.

2.14 Impact on the CommunityFootnote 55

CAN is having significant social, economic and environmental impacts on the community. Many of these significant impacts have already been identified by the co operative and its partners, and are described below.

Social Benefits

  • Social Justice: An important aspect of CAN's approach to transportation is the type of social issues they hope to address, in particular, social equity in transportation. CAN operations enable people with some economic challenges to visit friends and family, get out of the city and otherwise get where they need to go without relying on others to assist them. CAN has identified this, for example, as a real boost for members going to job interviews (and in getting to job interviews) in terms of increased self-esteem.Footnote 56
  • Improved Quality of Life: The social impact of CAN's creation and emergence on the transportation scene was eloquently stated when a member said to the staff, "Thank you - being a member of CAN has vastly increased my quality of life." CAN members have remarked how they have become more physically fit, some have paid off debts (student loans, etc.), returned to school, found employment or simply been able to say at interviews that yes, they do have a car. Other members have told CAN that just being able to get where the bus can't take them for a hike has allowed them a sense of freedom they hadn't previously felt. Many members also feel freer as they no longer have to worry about the burden of large vehicle maintenance bills needing to be paid. Many also feel reassured from their confidence knowing that the car they drive will get them to the destination, and that family members are able to visit more. CAN staff also have stories of members calling them to say "Thank you," that because of the money that CAN has saved them they were able to purchase their first house or condominium or townhouse (for example please see Tables 2 and 3 below, developed by the Electric Avenue condominium development for potential purchasers, as an indication of the types of savings possible).Footnote 57

Comparison of initial car prices from $15,000 to $35,000, comparing ownership costs to the price of membership. Based on average usages of 225 km and 20 hours a month for the year 2005

Table 2: Monthly Cost Comparison: Car Ownership vs. Car Co-op (2005)Footnote 58
Car Value Ownership Co-op Co-op Savings/Mo.
Based on average usage of 225 km and 20 hours a month
$15,000 $400 $108 $292
$25,000 $563 $108 $455
$35,000 $729 $108 $621

 

Table 3: Reduction of Total Interest by Applying Car Savings/Month to Mortgage Payments (2005)Footnote 59 
Mortgage $15,000 car $25,000 car $35,000 car
Assumption of 6% interest rate over a 25 year term
$200,000 $54,833 $64,242 $79,795
$150,000 $48,723 $59,846 $67,625
$100,000
$39,897 $47,137 $51,886
  • More Liveable Communities: By reducing the use of and number of cars, CAN contributes to making for more livable, safer communities that have fewer parked cars to contend with and have less noisy vehicles to listen to as well.Footnote 60

Box 5: Community Gardens
CAN was instrumental in helping the Mole Hill Community Housing Society in the West End reduce the City of Vancouver-mandated requirement for 110 parking stalls for Mole Hill Community Housing down to 28 parking stalls, as CAN agreed to host shared vehicles on the site. Much of the space that should have become parking stalls is now a community garden. This work also contributed to the later city of Vancouver bylaw on car sharing parking.

Ref.: Benefits of Car Sharing. CAN. http://www.cooperativeauto.net/benefits/#link1 . November 24, 2005


Economic Benefits

  • Supporting the Self-Employed: Significant portions of the CAN membership are small business owners and home-based consultants who need a presentable, reliable vehicle to perform tasks for their business. Through CAN, these members are able to have access to a car without committing to a car that may cost a lot more than it's worth to them. These members are also able to deduct off all car-related expenses against their income.Footnote 61
  • Boosting Local Business: CAN also supports local stores because there is an extra step involved in actually getting a car -- rather than just walking to the curb side. The car "just outside the door" is removed, and by doing this CAN has removed the impulse to drive to other communities to see what's for sale. CAN members start looking for options close by, and this usually means selecting businesses in their neighborhood rather than in outlying areas.
  • Cost Benefits for Individuals and Families: The important cost benefits for individuals and families from belonging to a car sharing organization are shown above in Tables 2 and 3.

Environmental Benefits

  • Improved Air Quality: Environment Canada reports that air pollution can be linked to an estimated 5,000 premature deaths in Canada each year and automobile emissions are the major contributor to air pollution in the Vancouver region. CAN selects cars on a number of criteria, including fuel-efficiency. Also, as of June 2005, 19 CAN members shared each car - at that time that was bout 1,890 people sharing 100 cars. According to CAN's statistics, 80% of people who join CAN sold or donated their car to do so. In June 2005 that was about 1500 fewer cars on the roads and in parking lots. With more fuel-efficient, cleaner burning cars on the road and less of them, CAN has made an important contribution to improving air quality in the Lower Mainland and on Vancouver Island.Footnote 62
  • Action against Climate Change: CAN's encouragement and significant expansion of car sharing in Vancouver and elsewhere (please see Section 4.7 below) directly and positively affects climate change. The David Suzuki Foundation reports that greenhouse gas emissions are the biggest factor in climate change. It also reports that the biggest slice of the problem is personal transportation. With car sharing as a choice, CAN members drive much less (1400 km/year) than the average driver (6000-24,000 km/year) in the Lower Mainland. In terms of greenhouse gas emissions, a CAN member's driving emits 0.32 metric tonnes of CO2 equivalents, which is 10-36 times less than the average driver.Footnote 63
  • Contributing to Sustainable Transportation: For many years, transportation analysts and planners have been looking for the answer to reducing the demands on current transportation systems by the ever increasing population of vehicles; the number of cars in the Lower Mainland is actually growing at almost twice the human population growth. CAN believes that car sharing may have provided that missing link in the transportation chain. Car sharing facilitates the most appropriate use of transportation means for the task: walking, cycling, roller-blading, taking the bus, car pooling and using taxis are becoming the choice of people looking to keep their personal expenses down while affirming their own commitment to the environment. CAN believes that the car becomes the mode of "last resort" once access to it is guaranteed.Footnote 64

2.15 Successes and Challenges

Many of the positive impacts that CAN has had to date are described above. Additional successes and challenges achieved and encountered by the co-operative that have been identified by CAN, its partners (for example, the Greater Vancouver Regional District and Environment Canada) and others are listed below.

2.15.1 Successes

CAN is a very successful car-sharing co-operative financially and operationally. In addition to reducing total vehicle kilometres travelled, reducing the number of vehicles on the road and reducing greenhouse gas emissions, the co-operative has also successfully met the following operating objectives: Footnote 65,Footnote 66

  • Helping members save on personal transportation costs. Members pay an average of only $117 per month for all their driving needs which is less than the cost of insurance alone for most private car owners.
  • Bringing together like minded-people in the community and helping to address community transportation issues.Footnote 67
  • Assisting other car-sharing organizations to establish themselves.
    • CAN staff have and continue to make themselves available to answer many questions that car sharing groups starting-up may have.
    • CAN's membership materials have been used as a point of departure for numerous groups across North America, and have even been translated for use by car sharing groups around the world.
    • CAN has provided assistance to aid in the development of successful car sharing co-operatives across Canada and in the United States through, for example, sharing CAN's business model for free and allowing others to use the web-based booking system CAN has developed.
    • CAN provides links for the public through their website to many other car sharing organizations and resources.
    • CAN supports vehicle sharing groups in other municipalities while they try to generate the membership to go it alone, for example, in Nanaimo, Courtney, Cortez Island, and Tofino. CAN has also been willing to sell their old cars to new startup co-ops/not-for-profits organizations, and carry the loan cost for these cars also.Footnote 68

Box 6: Sharing with other Car Sharing Organizations
"Sharing gets more -- by this I mean that sharing the information about how to build a car sharing organization actually made car sharing grow. We shared almost everything. And every time we shared -- more people in our market heard about us from others -- plus car sharing just had more and more legitimization every time it launched somewhere else. We are now and have been considered for years the leading authority of car sharing because of our open nature to sharing."
(Personal communication, Tracey Axelsson, 2005)

  • Increasing the recognition of car sharing as an important and a feasible approach in North America, and the awareness of transportation alternatives. CAN has done a tremendous job of helping people think more broadly about transportation issues, that there are alternatives to single occupancy vehicles, in addition to bikes and buses for example, there is also car sharing.
  • Successfully communicating with the membership, for example, please see the discussion of the Fuel Fluctuation Adjustment below.
  • Managing growth and being sustainable (e.g., not heavily in debt). As an example, to accommodate instability in fuel prices, in 2003 the CAN Board of Directors authorized a Fuel Fluctuation Adjustment to compensate for unusually high gas prices, month by month. When the average gas prices rise above 80 cents per litre or so, they add a small charge per kilometre driven -- just enough to cover the extra cost. This charge is the same for all price plans, and is calculated based on the average fuel efficiency of their fleet.Footnote 69
2.15.2 Challenges

The Executive Director, Tracey Axelsson, says that CAN's biggest challenge has always been a general lack of public understanding of how car sharing operates.Footnote 70 Car sharing organizations are faced with the challenge of introducing a new way to access vehicles in an "auto-addicted" world, and communication and education tasks can seem insurmountable at times.Footnote 71

Other important challenges to starting and operating a car-sharing organization (CSO) that CAN staff, members and others have identified, or that were identified in the review of documents available include:

  • Finding start-up funds. A very real negative to co-operative incorporation is finding start -up funds. Access to financing may be a challenge as well, as there is no person or corporation ultimately responsible for the company's debts. Many CSO's start out as co-ops though, so this does not appear to be insurmountable hurdle. CAN fortunately had Vancity Credit Union (a co-op and the largest credit union in terms of dollars in Canada) and the Co-operator's (one of the largest insurance groups in Canada) in support of them when it started.Footnote 72
  • Securing adequate financing to run the organization long enough to prove the arguments is a key challenge. Car sharing organizations are expensive to run and difficult to manage. A fledgling car sharing organization may be forced to fold before it becomes self-sustaining. The support of the Van-City Credit Union and the Co-operators Insurance Group was critical in ensuring that adequate funding was in place to ensure the financial success of CAN after four years of operation.Footnote 73,Footnote 74
  • Obtaining the next level of financing. Taking the organization to the next level of operation after 2-3 years of operation (approximately 1999 for CAN) took a new level of financing by CAN to finance the next set of cars. The leasing of cars solved this at that time.
  • Access to parking. One of the most pressing problems facing CAN was finding and securing adequate parking for their shared cars. The City of Vancouver has a Permit Parking scheme that allows only residents to park in certain residential areas and no businesses are able to get these permits. CAN was granted special dispensation for these permits and their vehicles are able to park in every permitted zone in Vancouver.
  • Insurance was a huge obstacle but the Insurance Corporation of British Columbia (the government car insurance provider in British Columbia) looked on CAN's not-for-profit status as a positive factor, and negotiated a unique insurance category for CAN at the start up.
  • Increasing and changing costs. Changing gas prices, insurance costs and the higher costs of maintenance for vehicles will always be a challenge to incorporate into CAN's fee structures.Footnote 75
  • One of the major challenges facing CAN has been and will be managing the growth resulting from their success. Where once the co-op had difficulty attracting new members it now signs up about 40-50 new members each month. And the bigger the co-op gets, the more attractive it is to new members.Footnote 76 CAN has the potential to grow very quickly (e.g., membership numbers); however, even with a large membership if there isn't enough people to drive all the cars that they have it doesn't work. A certain rate of car usage must be maintained to pay for financing, and car usage must be balanced against membership numbers. A major challenge for CAN will be preparing for significant growth in the future and putting in the administrative and financial systems needed to meet that challenge.
  • The challenge of the negative image of co-ops among the public (please see Box 7 below).
  • Becoming more like a service group and less like a club demonstrated by, for example, people beginning to steal mileage ("kilometer theft"). To prevent this, new technology (intelligent mobility system) would be needed for the lock system (please see Section 4.8 below) which in turn presents its own challenges.
  • Continually balancing the social, environmental and financial objectives of the organisation.

Box 7: The Challenge of the Negative Image of Co-ops
Another challenge for the incorporation of a car-sharing organization as a co-operative is the image of co-ops. Co-ops can often be burdened with a somewhat negative perception associated with being "co ops". Though co-operatives are a huge part of the financial pie in Canada, there is little recognition of this. If anything, the general public may still harbour a powerful aversion to co-ops. While we may be past the point were some folks may label us 'commies' co-ops can still be perceived as a bunch of hippies and farmers - not quite the thing for your average yuppie. This may actually mean we can be removed from making real change in the mainstream. At least initially, that is! Ideological considerations are those that cause the most ire among organizers but one can assume that we all want to reduce car use and ownership while improving the economic situation of those served. With this as the primary goal there is no real difference between the corporate forms. Still, one has to consider the question, "Is achieving profit the focus or achieving positive climate change?" For CAN, the question of focus was decisive in making the decision to incorporate as a co-op.Footnote 77

Ref. Is a Car Sharing Organization Best as a For-Profit? Non-profit? Co-operative? Co-operative Auto Network website. http://www.cooperativeauto.net/about/consult.html . September 29, 2005


2.16 Future and New Directions

CAN is pursuing aggressive growth strategies as more and more individuals realize the economic and environmental benefits of car sharing. Some of the next steps that CAN has identified as being pursued include:

  • Expansion along public transit nodes. CAN already hosts a number of vehicles along two bus lines, at SkyTrain locations, and close to two intercity ferry terminals. CAN plans for expansion will take the form of following established transit nodes while they also try to do their best for transit-poor areas and commuters.Footnote 78
  • Developing a fleet management service for corporate and government partners that would see CAN cars used for these partners for work hours and allow general member use for non-work hours.
  • Fully implementing a new corporate subsidiary, CorpCAN, which will permit corporate members (for example, architectural firms) to join CAN and provide CAN cars for staff work use.Footnote 79
  • Developing a lending circle with existing members to create a special fund and lending program for those unable to afford the initial $500 share purchase.
  • Expanding CAN's current fleet to include more hybrid vehicles.
  • Developing courses on accident avoidance and initiating a member's group health plan.
  • Planning for the implementation of an intelligent mobility system that incorporates a contactless smart card reader to allow members to open a reserved car and obtain a key. The smart card would also document who is using the vehicle, log the time used and how many kilometres the vehicle has traveled and then invoice the member. CAN is currently running a pilot program with this technology in two of their cars. The viability of large car sharing organizations can however be threatened in the implementation of this technology given it is new technology, very expensive, and risky (e.g., if a system is purchased that rapidly becomes outdated).
  • Strengthening marketing to help build better name recognition and awareness of the car sharing concept and of CAN.
  • Continuing to explore car sharing in new downtown housing developments (Please see Box 8 below). The City of Vancouver has recently embedded co-op cars as a development benefit (the "Co-op Car Bylaw"): three regular car spots required in a development can be exchanged for one co-op car parking space. $27,500 per car sharing spot is requested now as a deposit for a re-zoning commitment to use car sharing parking spaces to replace three regular places; this amount is approximately equal to the cost of a co-op car. Some developers are doing this voluntarily and some buildings may want to do it themselves: e.g. internalize a fleet and have their own fleet for the tenants in their building. CAN would be well positioned to manage such fleets.

Box 8: Car Sharing in New Housing Developments
As the awareness of car-sharing has grown, a number of property developers have begun to show an interest in providing car-sharing in new housing developments as an alternative to building the required parking. In the Electric Avenue development, a downtown Vancouver condominium project, the developers were given permission by the City of Vancouver government to build fewer parking spots in return for agreeing to buy cars for CAN which would be located at designated spots in the building's underground parking, and encouraging the residents to join CAN. They expected 10% of the 426 residents to sign up, but were surprised when 26% did so.

It generally costs $15,000 to build an underground parking stall. So that each two underground spaces not built covers the cost of a vehicle. With CAN's car-sharing ratio being approximately 19 members per vehicle, the developers quickly understood the math, and agreed to purchase seven cars. The co-op will manage the fleet, look after bookings, receive payments and take care of all necessary maintenance. CAN is now discussing similar arrangements with developers on other sites, with the support of the city's planners.

Ref.: 
1) Car Sharing in Vancouver. Guy Dauncey. First published in LEDIS, May 2004. www.earthfuture.com August 12, 2005.
2) Electric Avenue. http://www.rennie.com/electricavenuecondos/EAFlashSite.html. November 25, 2005.
3) City of Vancouver steers developers to car-sharing. Chad Skelton, Vancouver Sun. November 12, 2003.
4) Pooled cars latest twist in condo marketing. Peter Kennedy. The Globe and Mail. April 7, 2003.

  • CAN would ideally also like to increase their current ratio of 19-20 members per vehicle to 23 members per vehicle, which is the ratio of certain car-sharing organizations in Europe.Footnote 80

Future Challenges and Issues

  • Managing growth and finance at the same time. How to grow CAN as fast as it can, and as fast as needed but not take on too heavy a debt.
  • Technology needs. In order to increase CAN's fleet much beyond 150 vehicles, CAN will require more advanced technology.
  • Leadership transition. Preparing for the challenge of the transition to new leadership, at some time in the near or distant future, from the current dynamic and entrepreneurial leadership of the Executive Director and her senior staff who have so successfully led and managed the growth of CAN.
  • Future fuel increases. Gas prices are now driving membership, and interest in CAN, to a new large extent. This is both a challenge for operations and an opportunity for growth.
  • Potential subsidized competition by outside interests, potentially exacerbated in the future by the 2010 Winter Olympics in Vancouver.
  • Maintaining work-life balance. CAN is contributing to achieving work-life balance for its staff, and the ways and means of doing that are important to consider when setting up a CSO. The membership is achieving that partly with CAN also, but anyone starting up a CSO should be conscious of the work-life balance challenge.

3. Lessons Learned

A recent case study completed on the experiences of both Communauto (the largest car sharing organization in Quebec) and CAN has provided very valuable lessons-learned for developing and implementing a car sharing program.Footnote 81 The factors identified as contributing to success include:

  1. Start small and create the market, car sharing is a long term initiative with incremental increases. Rather than seeking to capture the largest possible market to reach the break-even point (generally 600 members), the first goal in launching a car sharing in a new city is to create - rather than take hold of - the market. Car sharing is too new in North America to omit this crucial step. Moreover, data analysis has shown that it takes three or four years to attract the first 300 to 400 members, after which growth accelerates with increased public awareness and word-of-mouth advertising (as has been the case for CAN). Consequently, without substantial start-up capital, jumping into a large-scale operation right from the beginning is very risky.Footnote 82
  2. Target the market. Given the impossibility of servicing all possible customer needs with a limited number of vehicles and a limited number of parking stations, it is critical to market strategically,Footnote 83 as CAN initially did in the West End of Vancouver. Related to this strategy is don't spread the cars too far away from each other and work in concentric circles so the next auto access option for a person outside their neighbourhood isn't too far to make it less feasible.
  3. Be pragmatic in your operations and keep it simple. To ensure financial health it is important to provide consistent basic services before offering more administratively and logistically challenging programs for members (e.g. being able to pick up a car at one station and dropping it off at another). It is equally important to avoid using systems where service must adapt to technology instead of the other way around. Keep it simple, give people what they want and charge fair prices. Rooting operations and planning in a business case has also been shown to be the key to the success of CAN.
  4. Choose appropriate technology. CAN has put in place appropriate systems to grow the organization; making the technology sophisticated enough for their needs, but not overcomplicated for people, and that works well for the membership.
  5. Secure both senior and lower level staff support in organisations and governments. Senior level staff support often does not guarantee support and awareness of car sharing at lower staff levels. It is important to educate and secure the support of lower level staff, particularly in the areas of parking enforcement and management.
  6. Work with the development community to provide shared cars in new developments (please see Section 4.8 above). Shared cars can help save the developers of new, inner city condo developments money through reduced project parking ratios, and are seen by potential buyers as an additional financial incentive (i.e. they will not need to own a car).
  7. Car sharing is more equitable than private ownership, but can still exclude lower income levels. Although CAN has developed, or is in the process of developing, member support and subsidy programs to assist lower income individuals become members, car sharing is still a more expensive option than public transit for many individuals.
  8. Car sharing works best with flexible work schedules. Car sharing works best for individuals with flexible work schedules, or who do not require a vehicle for work everyday.
  9. The need for a critical mass of urban density. Car sharing is particularly suited to densely populated urban centers where limited space only makes problems associated with the proliferation of the automobile worse. Downtown Vancouver is getting denser, even though it has always been dense; and the West End is particularly car and parking stressed. CAN was therefore a very good idea at the right time in Vancouver. Conversely, car sharing is more difficult in low density, suburban areas; in lower density areas it is difficult to operate shared cars in an economically sustainable fashion.Footnote 84

Other valuable lessons-learned that CAN and its partners have identified, during the interviews and outside of it, in establishing car-sharing organizations include:

  1. Starting CAN as a co-operative was probably the best approach to take (see Box 9 below) though it of course has its advantages and disadvantages (please see Section 3.2 above).

Box 9: Starting Up as a Co-op was the Best Way to Begin 
"Starting as a co-op really afforded us the best opportunity to try -- by this I mean that other organizations that have started felt the weight of the debt too strongly and sold out or folded long before they could make the positive turn that critical mass requires. Because I personally didn't feel threatened by the debt I really didn't lose sleep over it." Tracey Axelsson, 2005.

  1. The power of a group is vast. It is difficult to control the varying personalities, agendas and needs but if you really put in the energy and are able to get past what seems to be a huge amount of criticism - the end result will be successful, fair and strong.Footnote 85
  2. How do-able creating a car sharing organization is. A CSO really can be a low dollar start up and there is a wealth of free information available on the internet on it. CAN started with a sheet of paper, a used 486 computer, and a phone line plus two cars and 16 people. There are also no/low cost reservation systems available on-line already if a CSO wishes to have all the bookings done via the internet. Early financial support from other co-operatives can also be invaluable.Footnote 86
  3. There is lots of potential support. People, the media and the community love car sharing and will provide a lot of support.
  4. Don't just sell the car sharing concept based on its environmental appeal. Environmentalism will only take promoting the car sharing concept so far and probably only with people who are committed to not using cars at all. The environmental work needs to also be done by telling folks how much money they can save. As public recognition of car sharing grows, Tracey Axelsson says groups like hers continue to emphasize the financial benefits to new members, while counting the environmental benefits: "We're still doing the same job environmentally when we use the [financial] carrot, but we follow-up with the stick...Every kilometre has a cost to this planet, so there's no free ride," she says.Footnote 87
  5. Be entrepreneurial. CAN has been very good and has shown the importance of following up on opportunities when they come along by: being receptive to new ideas, identifying good opportunities, following up effectively, and creating mutually beneficial goals.
  6. Constantly lobby and promote with private and public sector organizations to publicize and promote the car sharing group, and build a broad based network. The Executive Director, for example, has and continues to do extensive outreach for CAN. Establish a 'face' for the organization, before you work too hard on the brand. Car sharing is based on trust - give the sharers someone to trust.
  7. Seek out and establish key strategic relationships and partnerships with the members and other organizations. Support from local government is important in securing convenient parking spaces.Footnote 88 The partnership with Vancity demonstrates innovative financing options, and the partnership with Discount Rental illustrates the complementary nature of car co-operatives and private car rental companies.Footnote 89 The relationship with the Co-operative Housing Federation of British Columbia demonstrates the value that partnerships with other co-operatives can bring to governance and strategic planning training.
  8. The importance of membership word-of-mouth sharing of experience to continue and expand growth. The pride of ownership of members is important in that the members are excited about CAN and spread the word and that they also are more likely to return the cars on time.
  9. The importance of having a strong core of committed individuals to do the work as the co-op grows, and the key role that the entrepreneurial talent of the staff and founding members plays. The continuity of people and organization is very important. Also, the importance of the organization's accountability to the membership and always trying to serve them but not going off-track as the membership changes (eg., as CAN moved outside the West End of Vancouver).
  10. Strong leadership. The critical importance of strong leadership in keeping things together and the personality of the organization intact. For example, the passionate and energetic leadership of CAN's Executive Director has been the key to the development of the organisation: she was driven to do it, vastly underpaid but totally committed.

4. Conclusions

CAN is a very successful car-sharing co-operative financially and operationally. Many important conclusions were identified from the experiences of CAN for other car sharing co-operatives by the interviewees and from the document review, these include:

  • Starting car sharing organizations as a co-operative is one of the best approaches to take.
  • Financing. Car sharing lends itself to the co-operative model, for example, through the initial share capital needed to capitalize operations.
  • Significant growth can be expected in car sharing organisations. Car sharing co-operatives can be expected to become much more widespread in the future and play an increasingly important and active role in community transportation issues.
  • Growth provides both opportunities and challenges. Given the expected growth of car sharing co-operatives managing growth for new and established co operatives will be continual challenges. Many of the challenges CAN faces in the future are both challenges and opportunities: CAN will keep growing; CAN will probably become more geographically dispersed and there may be pressure to go into areas where it does not make as much sense as before. There will also be opportunities to grow more quickly than they can, the organization is not constrained as much (for example, financially).
  • Meeting the challenges of climate change. Car sharing co-operatives have a potentially significant role to play in the climate change initiatives of communities, provincial and federal governments and, through more closely tying CAN to the climate change work of the various levels of government (for example, changing behaviour), potentially be an important opportunity for CAN to achieve results and its goals.
  • Partnerships are key. Developing and managing partnerships is crucial, both during the start-up phases of the organization and on an on-going basis.
  • Use of technology. The need and role of existing and new technologies, (ex., internet based booking systems, scan cards, etc.) is a critical issue and challenge for car sharing co-operatives.
  • Innovative solutions for the future. Some of the innovative opportunities that CAN is exploring (ex., interconnected public transportation infrastructure such as with TransLink, private sector partnerships such as CorpCan and residential development, etc.) have significant potential for car sharing to minimize impacts on the environment and maximize social benefits.

5. Reference

1. Axelsson, Tracey. Car Sharing: How it Works in Vancouver, Canada. 1999. Vancouver, British Columbia, Canada. Moving the Economy website, a partnership of the City of Toronto and the Canadian Federal Government. Last modified: 10/22/99 03:19:08 PM.

2. Canadian Co-operative Association. November 2004. Co-operatives and the Environment. Eco-co-op profiles.

3. Co-operative Auto Network. Frequently asked questions. http://www.cooperativeauto.net/member/faq.html . September 29, 2005

4. Co-operative Auto Network. CAN Annual Report 2003-2004.

5. Co-operative Auto Network. Benefits of Car Sharing. http://www.cooperativeauto.net/benefits/#link1 . November 24, 2005.

6. Co-operative Auto Network. Is a Car Sharing Organization Best as a For-Profit? Non-profit? Co-operative?. September 29, 2005.

7. Dauncey, Gary. First published in LEDIS, May 2004. Car Sharing in Vancouver. November 27, 2005.

8. Electric Avenue Condominiums. 989 Nelson Street, Vancouver. http://www.rennie.com/electricavenuecondos/EAFlashSite.html . November 28, 2005.

9. Environment Canada, EcoAction. British Columbia: Co-operative Auto Networks Pod Development Project. Last update: 2003-01-30.

10. Gossling, Fionna. 2001. What is a Car Sharing Co-operative? B.C. Institute for Co-operative Studies.

11. Greater Vancouver Regional District (GVRD).  Co-operative Auto Network Case Study. http://www.gvrd.bc.ca/sustainability/casestudies.htm. November 27, 2005.

12. Greater Vancouver Transportation Authority (TransLink).  Reduce Your Car Expenses Through Car Sharing. News Release. March 8 2004. November 27, 2005.

13. Jensen, Nicole. 2001. The Co-operative Auto Network Social and Environmental Report 2000-2001.

14. Kennedy, Peter. April 7, 2003. Pooled cars latest twist in condo marketing. Peter Kennedy. The Globe and Mail.

15. Shepherd, Colleen. 2002. Nelson & Area Auto Co-operative. Colleen Shepherd. BC Institute for Co-operative Studies. Victoria, B.C. 

16. Skelton, Chad. November 12, 2003. City of Vancouver steers developers to car-sharing. Vancouver Sun.

17. Stockholm Partnerships for Sustainable Cities. Project 68: Co-operative Auto Network (CAN), Canada. http://www.partnerships.stockholm.se/search_view.asp?Id=68 . November 24, 2005.

18. Transport Canada. Urban Transportation Showcase Program. Car Sharing in Canada: Making More Sustainable Personal Travel Choices. http://www.tc.gc.ca/programs/environment/UTSP/carsharing.htm. Urban Transportation Showcase Program Case Studies were researched and written by Culbridge Marketing, Noxon Associates Limited and the Verdant Group. Last updated: December 13, 2005.

19. Wanless, Tony. [Date unknown] Green goals need principle, interest. The Province, Smart Money.

6. Acknowledgements

 Notice: NEDG wishes to acknowledge the valuable ideas and time that all of the individuals interviewed shared and made available in the preparation of this case study, including:

  • Tracey Axelsson, Executive Director of the Co-operative Auto network (CAN)
  • AJ Andrien, Co-Chair of CAN Board of Directors
  • Derek Gent, Vancity Capital Corporation (subsidiary of Vancity)
  • Bob McDonald, Transportation Engineering, City of Vancouver

Also the time and effort that CAN staff took to provide very useful documentation.

For further information please contact:

Tracey Axelsson, Executive Director,
Co-operative Auto Network,
205-470 Granville Street
Vancouver, British Columbia, V6C 1V5
Canada
Telephone: 604-685-1393
Email: Tracey Axelsson
Website: www.cooperativeauto.net


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