Hey there, time traveller!
This article was published 18/5/2021 (192 days ago), so information in it may no longer be current.
Ten years ago a few brave souls — 40 members to be exact — bought a couple of sub-compact economy cars and started the ride sharing entity called Peg City Car Co-op.
Born out of a growing awareness of the deleterious effects that automobiles were having on the quality of life in urban areas and the environment in general — and the rising costs of operating a vehicle — car sharing had already become a big thing all over the world.
Like many societal trends, Winnipeg was a little late to join but the advantage in that is in learning from others’ mistakes.
After its 10th annual meeting last week, Peg City posted its third profitable year in a row, it booked $1 million in revenue for the year and just finished raising $600,000 through the province’s Community Enterprise Development Tax Credit Program.
There are now 60 Peg City vehicles on the streets of Winnipeg — including trucks, vans and a half dozen nifty Kia Souls — some of them featuring the art work of Synonym Art Consultation.
The enterprise was planning for major growth just when the pandemic hit and after the first lock down last March they even left a number of cars they had already purchased on the dealership lots because everyone was sheltering at home.
But when things opened last summer demand was high. Over the past 12 months they put 20 more cars on the road.
"We were still hitting our numbers when the pandemic hit and soon after we did have a dip," said Philip Mikulec, Peg City’s managing director. "But when things opened up people were thinking about changing, about downsizing and about how costly cars were and there was a really big bounce back."
“We are really proud of the progress we have made as an organization. More people than ever before are hearing about Peg City and are interested in it. It is really an exciting time.” — Dayna Kroeker
The trajectory of any startup includes a period of losing money. But considering the capital expense of vehicles (and the fact that as a money-losing startup Peg City was a riskier debtor and had to accept lending rates as high as 8.5 per cent), it is even that much more satisfying to the board that it has emerged as an attractive client for lenders.
"The irony is, now that we have cash the lenders are coming to us offering rates under three per cent," Mikulec said.
The enterprise now has about 2,000 users including 400 members who pay $500 refundable when they cancel, as well as casual users who pay a slightly higher user rate and close to a dozen new corporate members per year.
The plan is to get to 3,000 users and 100 cars by early 2023.
"We are really proud of the progress we have made as an organization," said outgoing president of the board, Dayna Kroeker. "More people than ever before are hearing about Peg City and are interested in it. It is really an exciting time."
When Duncan McNairnay joined the co-op in 2016, there was a Peg City car a few long blocks away. A couple of years later there were a handful more near his Wolseley residence.
"It really works for us," said McNairnay, 42, "Even with the addition of our daughter who’s now one and a half years old." (One Peg City car located near their home is equipped with a child booster seat.)
"Maybe when she gets older and is involved in extracurricular activities we’ll have to think about that again," he said.
McNairnay has never owned a car although his partner did. But it broke down when they moved in together and they decided to see if they could go without. He quickly lists off a number of reasons for being a Peg City member: environmental concerns, congested city streets made more dangerous with too many cars and the cost of owning a vehicle.
“It really works for us. Even with the addition of our daughter who’s now one and a half years old.” — Duncan McNairnay
Peg City figures the average Canadian spends $8,000 a year to own and operate a car whereas Peg City members spend less than $2,000 per year.
It’s not hard to imagine all the challenges of operating a car sharing business, but it is surprising that one of the biggest obstacles to growth is securing strategically located parking spots for the cars to live.
Peg City’s model is that the cars are picked and returned to the same spot. Mikulec said they sometime have to spend a year scouting out parking spots before they can put a car on the road.
"It has thwarted growth in the past," he said.
However, a year-old pilot project with the city has gone well, with the city reserving four on-street parking spots for Peg City cars 24-7. The hope is that a more fulsome arrangement can be made with the city to free up even more spots.
In the meantime, Peg City has become a favourite partner to those real estate developers who struggle coming up with enough parking for their development. City zoning regulations will give credit of between five and 10 parking spots for one Peg City spot because the thinking is that one car sharing vehicle takes approximately 15 cars off the road.
Peg City is still smaller than other city car sharing ventures. (One in Halifax, a little more than half the size of Winnipeg, has 100 cars.) But after 10 years Peg City Car Co-op has firmly ensconced itself and few would argue that the city is better off for it.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.