What Exactly Has Gone So Wrong at Zipcar – and the UK Vehicle-Sharing Market Finished?
The community kitchen in Rotherhithe has been delivering a large number of cooked meals each week for two years to pensioners and vulnerable locals in southeast London. Yet, their operations have been thrown into disarray by the news that they will not have use of New Year’s Day.
This organization had relied on Zipcar, the app-based vehicle rental service that customers to access its cars from the street. It sent shockwaves across London when it declared it would cease its UK business from 1 January.
It will mean many volunteers will be unable to pick up supplies from the Felix Project, that collects surplus food from grocery stores, cafes and restaurants. Other options are less convenient, more expensive, or do not offer the same convenient access.
“The impact will be massively,” stated Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the logistical challenge we will face. Many groups like ours are going to struggle.”
“Knowing the reality, they are all worried and thinking: ‘How will we continue?’”
A Significant Setback for Urban Car-Sharing
These volunteers are part of over 500,000 people in London registered as car club members, who could be left without easy use to vehicles, avoiding the burden and cost of ownership. The vast majority of those people were probably with Zipcar, which had a near-monopoly position in the city.
This shutdown, subject to consultation with staff, is a big blow to hopes that car sharing in urban areas could reduce the need for private vehicle ownership. Yet, some analysts also suggested that Zipcar’s exit need not spell the end for the concept in Britain.
The Promise of Shared Mobility
Shared vehicle use is prized by city planners and environmentalists as a way of mitigating the ills linked to vehicle ownership. Most cars sit idle on the street for the vast majority of the time, using up space. They also involve large CO2 output to produce, and people who do not own cars tend to use active travel and take transit more. That benefits cities – easing congestion and pollution – and boosts public health through increased activity.
Understanding the Decline
The company started in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its owner's total earnings, and a loss that reached £11.7m in 2024 gave no reason to continue.
The parent company stated the closure is part of a “wider restructuring across our international business, where we are taking deliberate steps to simplify processes, improve returns”.
Zipcar’s most recent accounts noted revenues had fallen as drivers took fewer and shorter trips. “These changes reflect the ongoing impact of the cost-of-living crisis, which continues to suppress demand for discretionary spending,” it said.
London's Unique Hurdles
Yet, several experts noted that London has specific problems that made it difficult for the sector to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of varying processes and costs that complicate operations.
- Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a annual electric car parking permit. A floating car club would pay over £1,100 annually, creating a significant barrier.
“Our fees should be one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models in their place.”
Lessons from Abroad
Nations in Europe offer examples for London to follow. Germany introduced national car-sharing legislation in 2017, providing a unified system 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 trails 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 treat car sharing as a form of mass transit, and link it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “There will be fill this gap.”
What Comes Next?
Other players can be split into two camps:
- Company-Owned Fleets: Which own or lease 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 – similar to Airbnb for cars. Players include 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 managing director, said there was a “significant chance” to win more users. “There is a void that is going to need to be filled, because London still needs to move,” Brimmer said.
However, it could take a while for other players to build momentum. In the meantime, more people may choose to buy cars, and many across London will be left without access.
For the volunteers in Rotherhithe, the next month will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit highlights the wider implications of its departure on community groups and the prospects of shared mobility in the UK.
