What Exactly Has Gone So Wrong at Zipcar – and the UK Vehicle-Sharing Market Finished?
The community kitchen in Rotherhithe has distributed hundreds of cooked meals weekly for two years to elderly residents and vulnerable locals in southeast London. Yet, their operations face major disruption by the news that they will lose use of New Year’s Day.
The group had relied on Zipcar, the car-sharing company that allowed its cars from the street. It sent shockwaves through the capital when it declared it would cease its UK operations from 1 January.
This means many helpers will be unable to pick up supplies from the Felix Project, which gathers surplus food from supermarkets, cafes and restaurants. Obvious alternatives are further away, costlier, or lack the same flexible hours.
“It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the logistical challenge we will face. A lot of people like ours will face difficulties.”
“Faced with this reality, they are all worried and thinking: ‘How will we continue?’”
A Major Blow for Urban Car-Sharing
These volunteers are part of more than half a million people in London who were car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those members were probably with Zipcar, which had a near-monopoly position in the city.
The planned closure, pending consultation with employees, is a big blow to the vision that car sharing in cities could cut the need for owning a car. However, some analysts also suggested that Zipcar’s exit need not mean the demise for the idea in Britain.
The Potential of Car Sharing
Shared vehicle use is valued by many urbanists and green advocates as a way of mitigating the ills linked to vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the side of the road for 95% of the time, occupying parking. They also involve large carbon emissions to produce, and people without a vehicle tend to use active travel and take public transport more. That benefits cities – easing congestion and pollution – and improves public health through increased activity.
Understanding the Decline
Zipcar was founded in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's overall annual revenue, and a loss that reached £11.7m in 2024 gave little incentive to continue.
The parent company stated the closure is part of a “wider restructuring across our global operations, where we are taking deliberate steps to simplify processes, improve returns”.
Zipcar’s most recent accounts said revenues had fallen as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said.
The Capital's Specific Challenges
However, several experts noted that London has particular issues that made it difficult for the company and its rivals to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of different procedures and costs that made it harder.
- Congestion Charge: The closure coincides with electric cars becoming liable for London’s congestion charge, adding extra expenses.
- Parking Permit Disparity: Residents in some boroughs pay as little as £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 annually, creating a major disincentive.
“We should literally be charged one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.”
A European Example
Other European countries offer models for London to follow. Germany enacted national shared mobility laws in 2017, providing a nationwide framework for parking, support and waivers. Now, the country has several shared cars per 10,000 people, while France has 2.1 and Belgium has 6.3. The UK lags behind at 0.7.
“What we see is that car sharing around the world, especially in Europe, is expanding,” said Bharath Devanathan of Invers.
Devanathan said authorities should start to view vehicle clubs as a form of mass transit, and link it with train and bus stations. He added that one unnamed client was looking at entering the London market: “There will be fill this gap.”
What Comes Next?
Other players can roughly be divided into two models:
- Company-Owned Fleets: Which maintain their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Person-to-Person Rentals: Which allow users to rent out their own vehicles via an app – a kind of Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.
Turo, a US-headquartered P2P service, is assessing the UK gap. Rory Brimmer, its UK head, said there was a “big opportunity” to win more users. “A space exists that is going to need to be filled, because London still needs to move,” Brimmer said.
Yet, it could take a while for other players to establish themselves. For now, more people may feel forced to buy cars, and others across London will be left without access.
For Rotherhithe community kitchen, the next month will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the future of shared mobility in the UK.
