What Has Gone Wrong at Zipcar – and the UK Vehicle-Sharing Sector Dead?
The community kitchen in Rotherhithe has distributed a large number of prepared dishes weekly for the past two years to elderly residents and needy locals in south London. Yet, the group's plans face major disruption by the news that they will lose access to New Year’s Day.
This organization had relied on Zipcar, the car-sharing company that customers to access its fleet of vehicles from the street. The company caused shock through the capital when it said it would cease its UK business from 1 January.
This means many helpers will be unable to collect food from the Felix Project, that collects excess produce from grocery stores, cafes and restaurants. Other options are less convenient, more expensive, or do not offer the same flexible hours.
“The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by the logistical challenge we will face. Many groups like ours are going to struggle.”
“Faced with this reality, everyone is concerned and thinking: ‘How will we continue?’”
A Significant Setback for City Vehicle Clubs
These volunteers are part of more than half a million people in London registered as car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. Most of those people were probably with Zipcar, which had a near-monopoly position in the city.
This shutdown, pending consultation with staff, is a big blow to the vision that car sharing in urban areas could cut 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 Potential of Shared Mobility
Car sharing is prized by city planners and environmentalists as a way of reducing the ills linked to vehicle ownership. Most cars sit as two-tonne dead weights on the street for the vast majority of the time, occupying parking. They also require large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take public transport more. That benefits cities – reducing congestion and pollution – and boosts public health through more exercise.
Understanding the Decline
The company started in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its parent company's total earnings, and a deficit that reached £11.7m in 2024 gave little incentive to continue.
Avis Budget has said the closure is part of a “broader transformation across our international business, where we are taking deliberate steps to simplify processes, enhance profitability”.
Zipcar’s most recent accounts noted revenues had declined as drivers took fewer and shorter trips. “This trend reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for non-essential services,” it said.
The Capital's Specific Hurdles
Yet, industry observers noted that London has specific problems that made it much harder for the company and its rivals to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of varying processes and prices that made it harder.
- Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a annual electric car parking permit. A similar shared vehicle would pay over £1,100 annually, creating a significant barrier.
“We should literally be charged one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”
A European Example
Other European countries offer examples for London to follow. Germany introduced national shared mobility laws in 2017, providing a unified system for parking, subsidies and exemptions. 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.
“The evidence shows is that car sharing around the world, particularly on the continent, is growing,” said Bharath Devanathan of Invers.
Devanathan said authorities should start to view vehicle clubs as a form of mass transit, and integrate it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “There will be fill this gap.”
What Comes Next?
The company’s competitors can roughly be divided into two camps:
- 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 hire out their own vehicles via an app – a kind of 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 “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.
However, it could take a while for other players to build momentum. In the meantime, more people may feel forced to buy cars, and many across London will be without a convenient option.
For the volunteers in Rotherhithe, the coming weeks will be a scramble to find a way. The logistical challenge caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the future of shared mobility in the UK.
