Rural Car Share Operations in the Kootenays

Colleen Matte
published April 30, 2015

Case Summary
The personal vehicle has been the most influential factor in the development of the built environment since the 1950’s. As a result, human perceptions are that it has become almost impossible to navigate without a car (Dale et al., 2012). Thus despite our growing understanding about the impacts of automobiles on the planet, private vehicle use is on the rise (Statistics Canada, 2010). In 2009, the transportation sector was the second largest source of greenhouse gas emissions, accounting for 28% of Canada’s total 690 mega tonnes of carbon dioxide equivalent (Mt CO2 eq) emissions (Environment Canada, 2011).

Grassroots movements have played an integral role in providing alternative solutions towards community sustainability (Capria, 2013). Car sharing is one of these initiatives that have grown in Canada over the last 20 years (Shasheen and Cohen, 2012) and provides an alternative that allows people the freedom of vehicle ownership, while at the same time, integrating economic, social and environmental benefits.

The Kootenay Car Share Cooperative (KCC) is a unique rural model that operates six branches in British Columbia (Nelson, Revelstoke, Kaslo, Kimberly, Fernie and Rossland) of various success. The KCC serves populations between 1,000-10,000 people and densities as low as 59.5 people per square kilometer compared to an urban-based car share like Vancouver’s Modo that has densities of about 5,249 people per square kilometer (Statistics Canada, 2010).

This case study explores the Kootenay Car share Cooperative (KCC) exploring the social factors in these communities in order to understand why some are successful and some are not in an effort to strengthen the existing branches, provide guidance for opening future branches and provide resources for other rural communities in Canada.

Sustainable Development Characteristics
Environmentally, Martin & Shasheen (2011) argue that car sharing can reduce personal driving by 30 to 70% which is a significant reduction that can support communities in achieving clean air and carbon reduction goals. In fact a KCC member survey performed in 2011 calculated that for each vehicle KCC has on the road 80,000 km of driving is reduced per year through shared use. This translates into 0.0987kg of GHG per vehicle and 165.9 tonnes per year for the 22 vehicles currently in the KCC fleet.

The social benefits of car sharing come in several forms, reducing stress, improving health and building community resiliency. Someone who is car sharing is walking to and from the vehicle, they are engaging in their community, they are another set of eyes on that street so that street become safer. They are also more likely to access entertainment that is close to home and to participate in community events and have a larger stake in their community, they know their neighbours (Henegar, personal communication, May 20, 2014). One of the challenges is that the link between these benefits and car sharing has yet to be communicated and understood in a way by the general society.

Car sharing can also be a more economical option than private vehicle ownership. When considering the true costs of vehicle ownership which include depreciation, regular maintenance and insurance it can be cost prohibitive for many low income individuals to own their own vehicle. This in turn can limit their access to community services found within the road infrastructure of our present communities. Car shares have the ability to turn vehicles into a shared commodity with costs divided amongst typically 10-20 people greatly increasing accessibility.

Critical Success Factors
A significant influence on the adoption and long-term success of a KCC branch appears to be linked to its founding members and its initial context. In the three cases where KCC was funded to seek out any community that was interested (Kimberley, Fernie and Golden), there has been a lack of ownership and investment into making it successful. In the cases where the branches have been successful from the start, namely Revelstoke and Kaslo, the founding members actually needed the services and were otherwise without a car to meet their transportation needs.

Understanding the existing transportation infrastructure and mobility culture in a new community is also a key factor to success. Communities with limited access to transportation alternatives are going to be more dependent on vehicle use and possibly more receptive to car sharing. Doing an extensive market survey to understand how many people would use the service and the types of vehicles they are looking for before starting operations is critical in the initial success of the branch. Starting a branch with at least two vehicles including a truck has proven to be the most effective way to attract new members and maintain member retention.

The economics of a community does have an influence over its success. Lower income populations that rely on transit alternatives are more likely to adopt car sharing in rural areas. The less availability to transit alternatives also signals a greater need for car sharing services. Finally, understanding the socio-political context of the community is also a key indicator. Communities that are more left leaning politically and engage in a variety of employment sectors that focus on public goods and services will be more likely to adopt car sharing. Having the local context to understand the local “truck or car” culture will also aid in determining the willingness of adopting car sharing practices of its residents.

Community Contact Information
Colleen Matte, M.A., B.Sc.
Nelson, British Columbia, Canada

What Worked?
Local champions are the most effective way to culturally embed the practice of car sharing in any one community by communicating the service benefits to peer groups and building the necessary social capital for adoption. People who are new to the concept need to speak with someone they know that is using the service to understand how it can work for them, peer group influence. When the founding members are using it frequently they generate personal stories they can share, influencing other people to join.

What Didn’t work?
New cities and towns that want to participate in the program are approaching KCC, however, with the lack of formally established criteria for starting a branch, KCC is not in a position to support them. This has become a dilemma that is hindering well-meaning communities that want to access KCC resources as well as causing a financial strain on the cooperative from branches that started without proper analysis in place.

Financial Costs and Funding Sources
Almost all of the branches have depended on the larger organization to support them financially before being able to achieve any type of profit. Historically, the success of a branch came from the social benefits of providing the service as the income from vehicle usage were barely meeting the needs of the operating expenses. Members provided loans to KCC, typically $1000, and were paid out monthly dividends of 3.25% in driving credits until the cooperative was able to return these funds.

As time went on. branches have strengthened and have been able to realize profits that are reinvested into the cooperative. Table 1 shows the financial profitability from each branch from 2011-2013 and uses solely the profit and expenses from vehicle operations and does not include any administrative or overhead costs.

Table 1 Comparison of Vehicle Income Minus Vehicles Expenses Over Three Years for KCC Branches

 201120122013Total ProfitsProfits Per Vehicle
Nelson$16,356$12,227$24,268$52,850$5,064.43
Revelstoke$2,871$3,941$2,605$9,417$4,708.29
Kalso$2,182$3,875$5,122$11,179$4,735.82
Kimberly$765$1,424-$767$1,422$711.15
Fernie$823$920$351$2,094$1,634
All Branches$22,997$22,386$31,579$76,962$3,370.74

Research Analysis
This case study was drawn from eleven interviews with individuals within the car sharing community to examine why some KCC branches have flourished while others have floundered. Three sub-questions were also examined. What success indicators are different between rural and urban-based car shares?, What is the influence on how a branch is started? What benefits does car sharing provide to communities? The objective was to give new communities the best chance in understanding what it takes to make car sharing work for them, and to learn from previous failures and successes. There is a certain amount of location design that need to be incorporated in this model as the political, social and economic context of a community all play a role in how the uptake of the business will be for them.

Detailed Background Case Description
What is Car sharing?
Car sharing is a method of vehicle ownership where a business or entity holds the title of the vehicle and its customers are able to book them for varying lengths of time. This is different from a car rental agency in that customers can book for short time increments (in some cases as low as 15 minutes). Car sharing cooperatives are not profit entities, they are membership based. There are now several models of car sharing including the traditional, one-way and peer to peer. 

  • Traditional model - vehicles have a designated location and must be returned to that location. Bookings are managed on a calendar basis and customers can reserve in advance or at the time of use if a vehicles is available. Customers are then billed out for the time and/or kilometers that they use.
  • One-way model - vehicles can be used from one area to another and users are not required to return the vehicle to the location they picked up the vehicle. Long distance trips are not offered by this service and it has only been implemented in large urban centers. Many vehicles need to be launched at once to make this an effective service.
  • Peer to peer model - involves personally owned vehicles being shared. Essentially individuals are renting out their own car in order to offset the costs of vehicle ownership. This model has had limited success due to uncertain and fragmented public policy and car insurance regimes that threatened the growth and investment in this model (Kent, 2013).

Car sharing History in Canada
The current modern car sharing model that we see in Canada today began in 1987 in Switzerland followed by Germany in 1988. Canada launched its first car share in 1994 with Quebec’s Commuauto followed by the Vancouver Auto Network (now known at Modo) in 1995 (Modo the car co-op, 2011). These car sharing organizations (CSO) continue to be the largest operators in Canada with approximately 1300 and 325 vehicles respectively (Car sharing Association, 2014).

In 2011, the Car sharing Association (CSA) was formed. The CSA works with shared-use mobility operators to advance industry standards, best practices and public policy advocacy. Collectively, the CSA represents more than 4,000-shared vehicles and 125,000 drivers. Their goal is to help their members develop business strategies, improve operational efficienc and increase the positive social and environmental impacts of car sharing through networking and conference events held around the world (Car sharing Association, 2014). In 2012 the Federation of Canadian Car share Cooperatives (FC3), essentially a subset of the CSA, was created with a focus on Canadian and cooperative centric issues along with the goals of the larger Association.

Currently there is exponential growth occurring in this industry for reasons that can be attributed to greater environmental consciousness, the recent economic crisis and rising fuel costs. This can be seen as a positive step environmentally as it is reported that car sharing programs reduce household greenhouse gas emissions by 0.58-0.84t per year (Martin and Shasheen, 2011).

Who is KCC in the world of car sharing?
Of the car sharing organizations in Canada, 85% of these are located in large cities including Toronto, Ottawa, Calgary, Vancouver and Montreal (Shaheen and Cohen, 2012). To date, KCC offers car sharing to the smallest communities and densities in North America (Shasheen and Cohen, 2012).

KCC services six municipalities, depicted in Figure 1, with populations ranging from 1,000-10,000. The Kootenay Region covers approximately 7.6 million hectares of the southeast corner of British Columbia and has mountainous terrain. The region extends from the Arrow Lakes country in the west to the Alberta Provincial Boundary in the east, and from the United States International Boundary in the south to Kinbasket Lake in the north (Environment Canada, 2013). Two lane highways wind through the valleys that link communities.

Figure 1. Map of KCC branch locations in Southeastern British Columbia.
 

There are three notable differences in operations of KCC compared to other car share cooperatives in Canada---vehicle purchasing, insurance and rate structure. Unlike other Canadian car shares that typically purchase or lease slightly used vehicles from car rental agencies, KCC purchases older vehicles outright that are under $10,000, usually over 100,000 km and a minimum of 5 years old. KCC’s current fleet has 22 vehicles with an average age of 10 years old (Car locations, 2014). This purchasing strategy significantly reduces loss on depreciation and the vehicles are worn in with less chance of manufacture defects arising. An older fleet also means lower insurance rates (Benefits of buying a used car, 2013).

Modo has made significant inroads with the insurance structure for car sharing in BC and as a result car sharing has its own classification that is more affordable than taxi, shuttle and other fleet based operations (K.New, personal communication, March 31, 2012). KCC does not insure its vehicles for collision or comprehensive and has been able, to this point, pay out any claims due to at-fault accidents and currently hold a 52% discount off of the Insurance Corporation of British Columbia (ICBC) rates because they have never made a claim.

KCC’s rate structure includes hourly and kilometer charges that are lower than any other car sharing organization in Canada. The main reason for this is that trips are significantly different for rural communities. While most urban trips are not over a long distance, due to traffic congestion, they often take longer. This is in contrast to rural trips which often take 40 km to get to the next community to access the services that members may need.

Who uses car sharing and why?
The results of this case study showed that there are some general trends and common uses for people in all of the branches. Past research shows that car sharing appeals to individuals who identify themselves as social activists, environmentalist, innovators, economizers or practical travelers (Burkdardt and Millard-Ball, 2006). For KCC the following four identities relate to the type of people who became members.

  • To increase their mobility. According to the 2009 KCC members survey 65% of members fall into the category of either not owning a car by choice or unable to own a car due to financial constraints. These members are able to do most of their trips by transit or active transportation and when these options are not viable they use car sharing to supplement their mobility needs.
  • To be more economical - Once the hurdle of understanding the true cost of vehicle ownership is overcome many members seek out KCC as a more economical alternative (K. Gorecki, personal communication, June 12, 2014).
  • To have access to a variety of vehicles. Eighty percent of KCC members indicated that one of the reasons they decided to join and continue to be a member is to have access to a truck or van the few times a year they need it. Interestingly, when the Kaslo branch was allocated a truck the membership increased dramatically but so did the use of the car. People were signing up for the truck but then realized the saving and usefulness of having access to smaller vehicles as well (A.Shadrack, personal communication, May 1, 2014).
  • To reduce their environmental footprint. The eager environmentalists are often the first to sign up to car sharing when a new branch is opened in a community. They are already seeking out ways to reduce their environmental impacts and understand the significance of the transportation sector on their GHG production. However, it is also these early adopters that often believe in the concept but fail to use the service in order to make it viable. They are either unwilling or unable to make the shift from private vehicle ownership but feel the service should be available in their community.

Strategic Questions

  1. How does one scale up and out car sharing across the country?
  2. The car culture is so strong in North American culture, what strategies could be used to promote greater adoption of car sharing and cooperatives?
  3. Should regulation be enacted to stimulate car sharing in new condo development?
  4. What is the relationship between increased car sharing and enhance public transportation?
  5. Should there be a multi-model shift in transportation options for Canadians?
  6. The sharing economy relies a lot on trust building social capital. How could this affect activities like caring sharing?

Resources and References

Benefits of buying a used car. (2013). Retrieved June 15, 2014 from https://www.cars.com/articles/benefits-of-buying-a-used-car-1420680890104/ 

Burkhardt, J.E., Ball, A.M., (2006).Who is attracted to carsharing? Retrieved from http://www.citeulike.org/user/imnotjesus/article/3058048

Capria, T. (2013). Community Economic Development and Environmental Justice: Sharing environmental justice and community economic development strategies. Duke University. Retrieved from http://law.duke.edu/sites/default/files/clinics/cec/capria.pdf

Car locations. (2014). Retrieved June 13, 2014 from http://www.carsharecoop.ca/car-locations/

Carsharing Association. (2014). About. Retrieved from http://carsharing.org/about/

Dale, A., Dushenko, W., Robinson, P. (2012). Urban sustainability reconnecting space and place. Toronto: University of Toronto Press. doi: 10.1111/cag.12130

Environment Canada. (2011). National inventory report: 1990-2009 greenhouse gas sources and sinks in Canada. Retrieved from http://www.ec.gc.ca/Publications/default.asp?lang=En&xml=a07097EF-8EE1-4FF0-9aFB-6c392078d1a9

Environment Canada. (2013). Welcome to the Kootenay Region. Retrieved from http://www.env.gov.bc.ca/kootenay/

Kent, J. (2013) Carsharing as active transport. What are the potential health benefits? Journal of Transportation and Health, 18 September 2013. http://dx.doi.org.ezproxy.royalroads.ca/10.1016/j.jth.2013.07.003

Martin, E., Shaheen, S. (2011). The impact of carsharing on public transit and non-motorized travel: an exploration of North American carsharing survey data. Transportation Sustainability Research Center, 4(11), 2094-2114; doi:10.3390/en4112094

Modo the car co-op (2011). Home. Retrieved from http://www.modo.coop

Shaheen, Susan and Cohen, Adam. (2012). Carsharing market overview, analysis and trends. Published by University of California. Retrieved from http://76.12.4.249/artman2/uploads/1/Carsharing_Innovative_Mobility_Ind…

Statistics Canada. (2010). Greenhouse gas emissions from private vehicles in Canada 1990 to 2007. Retrieved from http://www.statcan.gc.ca/pub/16-001-m/2010012/part-partie1-eng.htm