Communauto wants to become a social utility trust

Communauto intends to become a social utility trust, which would transfer a portion of the shares of the founder and management group of the car-sharing service to the community.

“I use it almost every day – after work I take it to get home, I take it to go to the gym,” said one Montrealer CityNews spoke to.

Another saying, “I use it like once a week – something like this – just to avoid the subway and take my bike.”

Communauto, a pioneer of car-sharing in North America, wants to “sustainably anchor the company’s social, urban planning, and environmental mission.”

To achieve this, the company is betting on changing its corporate structure to become a social utility trust.

According to the Civil Code of Quebec, a social utility trust is “established for a purpose of general interest” and “its essential purpose is not to make a profit or operate a business.”

“What happens when you have a company that is financed by regular capital is that you always have to think about their exit strategy,” said Communauto’s president and founder, Benoît Robert. “So that’s the risk. If you are not able to find another organization that will replace the investor, you might have to sell the entire company and you have no other choice than to do that.”

Robert announced his company’s intention at the fourth edition of the Montreal Climate Summit on Tuesday.

“I’m getting older year after year, and with me and my management team, we talked that it was time to think about the future, and to think about the means to preserve the mission of Communauto,” said Robert.

“The Montreal Climate Summit reminds us of the urgency to act, but also of the need to sustainably transform our economic models to meet environmental challenges,” Robert said. “Car sharing is a powerful lever for reducing our carbon footprint, relieving urban congestion, and improving quality of life. With this initiative, we want to ensure that Communauto’s mission, which is fundamentally in the public interest, can be protected and strengthened, even after the current team has passed the torch.

“It’s a gesture of responsibility towards the community, and a structuring response to the challenge of ensuring the sustainability of sustainable mobility solutions.”

When a company is under an S U T, it cannot be sold, and any changes to the trust, including the potential sale of the company, require court approval to ensure that its original social benefit is maintained. 

“In the past, there have been too many examples of failure. And we don’t want to take the risk to eventually sell Communauto to an organization that does not really know well how to handle a car-sharing organization,” said Robert.

“And for that reason, we need to … find the right structure to be able to attract some more patient capitals, and capitals coming from organizations or people that believe and want to support our mission and that’s the goal of what we’re announcing today.”

That’s good news for current users of Communauto who say they like the service, as they’ll have access to this service for as long as they want.

“Our goal is to convince as many people as we can not to buy a car or to reduce the way they use the car, and for us it’s important to find a way to maintain that mission in the future,” said Robert.

–This report by La Presse Canadienne was translated by CityNews