City Car Club set for £10m takeover

Published on Sunday 24 April 2011 18:29

THE founder of a car-sharing club which operates in major cities in the UK is in line for a multi-million-pound windfall after it emerged he is considering bids from potential buyers.

The City Car Club, which claims to be the world's "greenest", operates in 14 cities, including Edinburgh and Glasgow.

It offers members hire of low-emission cars and vans which can be booked by the hour or day.

Vehicles are located in designated parking bays with the company covering insurance, tax and cleaning.

The pay-as-you-go "green" initiative, pioneered by Edinburgh City Council in 1998 and run by private companies, has become increasing popular due to increasing fuel costs and environmental concerns.

James Findlayson, the company's chief executive and biggest shareholder with a 30 per cent holding, has hired corporate finance firm Cavendish to handle a sale after receiving bids. Mr Findlayson can sell providing there is agreement from 75 per cent of the other shareholders.

The council did not "own" the car club and over the years a number of car clubs thoughout the UK merged to form the present City Car Club.

It is estimated the takeover could net 10 million as private equity investors as well as carmakers and rental firms eye the expanding sector.

Last night green car club members, green campaigners and motoring experts said they hoped the scheme would continue to run.

The Edinburgh City Car Club, the first in the UK, estimates those who drive around 7,000 miles a year could save an annual 1500 by sharing rather than owning taking into account MoTs and maintenance costs.

A study carried of UK cities found each car removes 24 privately-owned cars from the road.

The scheme was set up in 2000 and generated sales last year of 3.5m. It is yet to make a profit, but is expected to do so next year. The car-sharing sector is thriving with motoring giants such as BMW and Daimler showing an interest.

Patrick Harvie, co-convener of the Scottish Green Party and prospective candidate for the Glasgow region, said: "Right across the political spectrum, a commitment has been made to car club and bike hire schemes in reducing emissions from transport in cities.

"I would hope anyone would see that this type of business is one with a bright future."

Jim Ferguson, 55, from Edinburgh, who has used the car club for a number of years said it was an "invaluable" resource.

"I found the car club ideal for any in-town needs of up to three or four hours, shopping or going out in groups. As a result using a car in town tends to be less casual and more conscious, which must have an impact on traffic.

"Returning the car to an allocated slot makes it easy and efficient to use. There's a 'community' feel among members too - if you leave a coat in the car by mistake, the next driver will let you know, and it will be there when you return to the car.

"Because I tend to use the same car, located nearest the house, there's also a sense of ownership which ensures the vehicles are well looked after."Neil Grieg, director of policy at the Institute of Advanced Motorists, said he hoped the car club would continue to run under new ownership.

He added: "Car clubs have become thriving businesses and are certainly one area of the economy benefiting from the rise in fuel prices."

The car club has more than 4,000 members in Edinburgh and more than 100 cars in many parts of the city including the airport and Waverley station.

Background

THE City Car Club was pioneered in Edinburgh by James Findlayson in 1998 and now operates in 14 cities in the UK.

What began with a handful of vehicles run on behalf of the council by Budget car rental has become one of the largest car club operators in the UK with 500 cars and more than 20,000 members

Members pay an annual fee of 50 and can book low-emission cars and vans by the hour, day or longer.

If a car needs re-fuelling during a booking the member pays with a fuel card with the bill being paid by the club. All vehicles have a dedicated parking bay. Typical costs for a Fiat 500, Toyota IQ, Vauxhall Corsa and Ford Fiesta are 5.20 an hour or 42 for 24 hours.

A van costs 8.20 an hour or 72 for 24 hours.