What Exactly Has Gone So Awry at Zipcar – Is the UK Car-Sharing Sector Dead?
A community kitchen in Rotherhithe has provided a large number of cooked meals weekly for the past two years to elderly residents and needy locals in south London. However, the group's plans face major disruption by the news that they will lose use of New Year’s Day.
This organization had relied on Zipcar, the car-sharing company that customers to access its cars via smartphone. It caused shock through the capital when it said it would cease its UK operations from 1 January.
It will mean many helpers will be unable to collect food from a major food charity, that collects excess produce from grocery stores, cafes and restaurants. Other options are further away, more expensive, or lack the same flexible hours.
“It’s going to be affected massively,” stated Vimal Pandya, the project's founder. “My team and I are concerned by the operational hurdle we will face. Many groups like ours will face difficulties.”
“Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?”
A Significant Setback for Urban Car-Sharing
These volunteers are among more than half a million people in London registered as car club members, now potentially left without convenient access to vehicles, without the hassle and cost of ownership. Most of those members were likely with Zipcar, which held a dominant position in the city.
This shutdown, subject to consultation with staff, is a serious setback to the vision that vehicle clubs in urban areas could cut the need for private vehicle ownership. Yet, some experts also suggested that Zipcar’s exit need not spell the end for the idea in Britain.
The Promise of Car Sharing
Shared vehicle use is valued by city planners and green advocates as a way of reducing the problems associated with vehicle ownership. Most cars sit idle on the side of the road 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 walk, cycle and take public transport more. That helps urban areas – easing congestion and pollution – and improves public health through increased activity.
Understanding the Decline
The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's total earnings, and a loss that grew to £11.7m in 2024 gave no reason to continue.
The parent company stated the closure is part of a “broader transformation across our international business, where we are taking deliberate steps to simplify processes, improve returns”.
Zipcar’s most recent accounts noted revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said.
London's Unique Challenges
However, several experts noted that London has specific problems that made it much harder for the sector to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of varying processes and costs that made it harder.
- New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Parking Permit Disparity: Residents in some boroughs pay just £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 annually, creating a major disincentive.
“Our fees should be one-twentieth of a resident’s permit,” 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 examples for London to follow. Germany enacted national shared mobility laws in 2017, providing a unified system for parking, subsidies 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.
“The evidence shows is that shared mobility around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers.
He suggested authorities should start to view vehicle clubs as a form of mass transit, and link it with train and bus stations. He added that a potential operator was looking at entering the London market: “There will be fill this gap.”
What Comes Next?
Other players can be split into two models:
- 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 – a kind of Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.
One company, a US-headquartered peer-to-peer platform, is already weighing up the UK gap. Rory Brimmer, its UK head, said there was a “significant chance” 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 some time for other players to establish themselves. In the meantime, more people may feel forced to buy cars, and others across London will be without a convenient option.
For Rotherhithe community kitchen, the coming weeks will be a rush to find a solution. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the prospects of shared mobility in the UK.