The Chainlink

Just got this email:

Our name is changing!

Exciting news!! IGO will soon become Enterprise CarShare.

Enterprise Holdings, parent company of Enterprise CarShare, acquired IGO CarSharing in May 2013, and we've been operating under the Enterprise CarShare network since then.

Enterprise has been delivering transportation alternatives right where people live and work since 1957 and first launched hourly car rentals in Chicago in 2005. Enterprise continues to lead the neighborhood market with both car-rental and car-sharing options, and is renowned for offering affordable, accessible and flexible service in towns and cities of all sizes.

The name change is a natural progression to stay aligned with the Enterprise grassroots legacy, sense of community and leadership role in serving as a sustainable transportation provider in the Chicago area.

In the coming weeks, you may start seeing Enterprise CarShare parking signs and decals popping up around town.

Here are three things you need to know during this time:

  1. Make all reservations at www.igocars.com.
  2. Continue using your current membership card or fob.
  3. Use your car-share vehicle like you always do.


Stay tuned for more communications from us about the transition.

If you have any questions about this transition, please reach out to our Member Service team at 773-278-4446 or info@igocars.com

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Note that the sale was just of the operations: car-sharing is a capital intensive business, and I-Go just wasn't able to offer the same scale. Non-profits just aren't very good at such businesses, anyhow. The 501c3 is still around, and will use the proceeds to continue CNT's work on transportation alternatives -- the same ends, just different means.

http://www.cnt.org/2013/05/28/a-message-from-cnts-ceo-kathryn-tholin/

http://www.cnt.org/2013/06/26/celebrating-35-years-igo-carsharing/

http://www.theatlanticcities.com/commute/2013/05/what-happens-when-...

I've seen other instances where a 501c3 has gone bust: its assets are sold and the proceeds are disbursed to another 501c3. CNT has also spun out other for-profit ventures in the past, most notably the Greener Cleaner. It was founded as a "think-and-do tank" many years before we had some of the choices that we have now (e.g., B-Corps) for for-profit organizations that have social/environmental missions, and I don't see anything wrong with that.

Thanks, Payton.

From the third link:

IGO has sold its cars, its parking locations, its member list, its intellectual property, its staff and even its name to Enterprise for an unspecified amount. But the CNT nonprofit that created it will still exist – albeit under a new, not-yet-determined name – to work on the next innovation that will enable people in Chicago to "live well without owning a car." The nonprofit has kept, for instance, the solar canopies that cover and charge its (former) electric cars. The proceeds from the sale to Enterprise will be folded back into the nonprofit for this purpose, supporting whatever the next new thing winds up looking like.

I'm sorry you like to take my comments so personally; I hope you can figure that out.

I never judged iGo as a service or business. I am a member and use it often. I love iGo. I was criticizing the transaction only.

I already outlined a facility for selling charitably-created assets to for-profit enterprises in a previous comment. They should have to publicly auction iGo to the highest bidder with all (100% less costs of the transaction) the proceeds being taxed. I wouldn't mind covenants being added like "if you buy it, you have to continue to run it as a car sharing service for at least 5 years" (as opposed to just liquidating the cars and computers), or even "you cannot be a major competitor in the specific market already" (to keep ZipCar from having a monopoly). I prefer taxing the proceeds at 100% to having a government entity run the auction because I prefer the charity (or now- "charity," if you will) set the terms (within reason) as opposed to some bureaucrat or judge, who has no experience with the business.

I don't think taxing the buyer (Enterprise or others) directly would make sense because such taxes would not achieve any additional proceeds to society (the company would just figure the tax into the transaction and pay less). Also, taxing the buyer would add complexity and taking over (being the buyer of) a business like iGo should be encouraged.

As for your assumption about the desperate nature of the situation, I think the fact that a sophisticated corporation sees value in the business necessarily suggests the situation is not drastic. I don't know (or care) about whether or not CNT profited. The fact is they had something valuable that belonged to all of us and were able to sell it without compensating us in any way. Also, even if they did compensate us, without a public bidding process, a fair price cannot be guaranteed.

I will admit, back then we didn't have the JOBS Act or the ability to finance ideas like this as we do today so I would agree that at the time 501(c)(3) was probably appropriate. It might even be appropriate today -- I don't know. But again, my criticism isn't about iGo, how/why it started, or why it exists. It's about the transaction (or any transaction) where a charity is sold to a for-profit entity.



h' $550 said:

Tom, I'd really enjoy a level-headed discussion about this without your usual condescention.

Are you up to the challenge?

The purpose of setting up the car sharing program was to help foster a cleaner and safer  city by making it possible for more people to avoid car ownership.
I know the people behind it and have no doubt their intentions were pure, and I doubt that they ever imagined a scenario in which they would entrust stewardship of the program to an established for-profit corporation.

My assumption was that the sale to Enterprise was akin to grasping at the only chance they had to salvage a program that they no longer had the resources to effectively manage themselves.  Do any of you have evidence that CNT profited from the sale?

No, that was not the goal.

In whole 501(c)(3) states (in full) that it provides tax exempt status to the following:

Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

Now, I'm not a lawyer; I'm a finance guy and a programmer. So I'm not here to argue the law (the lawyers can do that). To me this is about morality (as I think I made clear by my first statement).



h' $550 said:

Tom, what was the ultimate goal of that alleged subsidy?  Was that goal not met by facilitating the advent of the car sharing model in the private sector?
 
Tom Dworzanski said:

The problem is we subsidized them as taxpayers and as society to a very large degree and our massive subsidy was sold without any compensation to those who bore the burden of it (us). Now I'm not saying igo should remain a nonprofit as car sharing should no longer be considered a charitable cause given the established market, but what I am saying is the company should have been sold at open auction to establish a fair price and 100% of the proceeds from the sale should have been taxed to pay back our investment.



h' $550 said:

Not seeing the problem here. It's not like CNT paid out dividends to shareholders with the proceeds from the sale.
 
Tom Dworzanski said:

I think it's shameful to use section 501(c) to build a company only to sell it to a for-profit corporation. It should be criminal.

I think the real question here is... Will they pick you up?

That would be awesome. So would being able to pick up and drop off in different locations. That seems impossible, but a dream nonetheless.

Thedutchtouch said:

I think the real question here is... Will they pick you up?

Missed this post before....

These are the exact same complaints that were all over Yelp when St. CNT was still managing it-- not sure it's fair to blame Enterprise just yet.
 
clp said:

So far, things look like Enterprise has dropped a few balls.  I used I-GO on Sunday morning at 5:30am to drive out to Joliet.  When I picked up the car the tank was nearly empty.  So I immediately tried to refuel before I got on the I-55 expressway.  Who knew what suburban gas stations would be open at that hour?  But..

-  The PIN read-out in the glove box didn't work, other than to wish me "Have a nice trip."

-  No one picked up on the I-GO hotline when I called for help

In fact, no one picked up on the hotline until after 8am, when I had already driven out to Joliet and was on my way back to Chicago.

I have been an I-GO and CNT member since their inception.  I embraced both because of their environmental stance.  I never had difficulties like these.  And efficient hybrid cars no longer seem to be available.  Will the system survive Enterprise?   Reasons to renew my membership are dwindling; I may go elsewhere for my shared car in 2014.

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