Episode 2 – From Zero to Launch: Montreal Carsharing

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Vulog is launching a brand-new carsharing service in Montreal! We are teaming up with a local dealership group to bring Montrealers a smarter, more convenient way to get around. We want to bring you along for the ride with an exclusive, first-of-its-kind series that takes you behind the scenes to show what it really takes to build a successful carsharing service from the ground up.

Last week we looked at the big picture and visualized the journey from zero to launch, outlining the key components that need to be established between September and the launch in May. In our next episodes, we will tackle one of the main steps each week in greater depth, kicking things off with vehicle sourcing and financing. After all, what is a carsharing service without cars?

Deciding on Fleet Size

As we mentioned in last week’s episode, even from the very beginning we had already set our targets: a free-floating fleet of 600 vehicles in at least two different models. That might sound very specific, and it is. The reason for those numbers comes from our research in gauging the market, making sure that we have a reasonable number of vehicles that will not overpower nor underperform. We need a fleet size that can be ready to hit the ground running at launch, and will be able to operate in a complimentary way to our friendly competition in the market whose own fleet will be on the ground next to ours.

Sourcing challenges

Finding the vehicles to nourish our 600-car fleet was one of our biggest challenges early on.

Among the many challenges of launching in such a short timeframe, sourcing vehicles for a fleet this size was one of the hardest. The fate of the entire project truly hinges on securing vehicles, but finding partners with enough inventory and a financier willing to invest is a very precarious process. From the start, we knew that we wanted a fleet that was robust and reliable – cars that could stand up to harsh winters and warm summers on the street. They should be easy to maintain and acquired at a fair rate.

That said, currently there is a general lack of available vehicles in the market which caused us to search intently for potential partners among the OEMs and dealerships for those who were willing to supply vehicles in such a short period of time. This is where we had some good luck, as Montreal is no stranger to carsharing and we were able to team up with a contact in the city who wanted to partner with us. Despite the general issue of vehicle availability, we were able to get our supply of vehicles thanks to our dealership partner who was able to source some for us.

Trial by Financing

The next challenge came with financing. In Canada, leasing is relatively flexible thanks to the open lease model, which gives you the option to purchase the vehicle at the end of the term or simply return it. In contrast, the leasing structure in some European countries – France, for example – is far more rigid, typically requiring the vehicle to be returned at lease-end. This restricts operational flexibility and eliminates any upside from potential resale value.

Financing a fleet of 600 vehicles is a significant undertaking, and many leasing companies are hesitant to assume that level of risk, especially when it involves rental, ride-hailing or carsharing operations.

We heard many of those concerns repeated. But there were two things going in our favor: Our previous success with Leo&Go, proving that a carsharing company can be stable and profitable in just two years. The other influencing factor was our fellow carsharing companies already in the market, as they helped increase awareness around shared mobility and its potential.

Leo&Go carsharing which achieved profitability in under 2 years and continues to grow is a testament to the huge potential of shared mobility

Discussions were long and arduous. In those early months, acquiring vehicle financing was the key to moving forward. The suspense was ever-present as an interested party’s initial talks protracted into several months of negotiations. It was only on one chilly Christmas Eve, that the call from Foss National Leasing came through that officially finalized the deal and brought our carsharing project into the new year with jolly celebration.

Next Week on From Zero to Launch: Montreal Carsharing

In next week’s episode, we explore what it takes to put together a stellar team and how they preparing for the upcoming launch (cue Rocky training montage). 

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