In a bid to expand car sharing in the capital region, Victoria Car Share Co-op is in talks to merge with Vancouver-based car-share giant Modo.
The merger, which requires membership approval, would give the expansion-minded Modo a foothold on the Island and stabilize the future of the Victoria co-op.
“We’ve never been a booming business in Victoria and, three years ago, there were expenditures made in the hope of generating new business. We saw a rise, but not enough to offset the additional expenditure,” said Tom Berkhout, chairman of the Victoria Car Share Co-op board. “We were kind of digging ourselves into a hole.”
The co-op was in a decent cash position, but with cars as depreciating assets, the long-term future was a concern, he said.
Berkhout said the decision came down to whether Victoria Car Share should take on the “pains and risk” of growth themselves or work with Modo “to make the leap to a bigger size car-sharing company.”
“What Modo can do in one year would take us four years,” he said.
A merger of the two car-share firms — two of the oldest in North America with Victoria Car Share founded in 1996 and Modo in 1997 — there would be one company under the Modo brand doing business on each side of the Strait of Georgia.
Victoria’s fleet of 23 cars and 800 members would be combined with 345 Vancouver cars and 11,000 members. Members in both cities would have access to cars on both sides of the water.
Modo chief executive Nathalie Baudoin said it would also mean newer cars for Victoria, with upgraded vehicle access, software and online registration. While the Victoria group stands to benefit with fleet renewal and improved systems, Baudoin said the merger also fits nicely into Modo’s plans.
“Modo has a mandate to expand,” she said. “We have been growing in the Lower Mainland and for us [the merger is] a way to grow in an organic way.”
Modo says it has seen 20 per cent revenue growth in each of the past three years while, in the last year, it has launched car-sharing in Port Moody and Coquitlam, doubled its fleet in Surrey, increased membership and launched online registration.
Baudoin said the company has three goals over the next three years — expansion, creating good value and becoming a household name — and the move into Victoria will help.
The Victoria Car Share Co-op board has voted unanimously to go ahead with the merger and talks are continuing with Modo to hammer out a deal that will be voted on by members in February at the annual general meeting.
If approved, the merger would be effective in April.
“They have done a great job in Victoria and we want to invest here and help car-sharing grow,” said Baudoin. “A single brand will upgrade the value of both services and increase awareness of car-sharing in both locations.”
The companies note that their cultures and rate systems are similar which will make merging fairly seamless.
