What Exactly Has Gone So Awry at Zipcar – Is the UK Car-Sharing Sector Dead?
A volunteer food project in Rotherhithe has provided hundreds of cooked meals each week for the past two years to pensioners and needy locals in south London. However, their operations have been thrown into disarray by the news that they will not have access to New Year’s Day.
The group depended on Zipcar, the app-based vehicle rental service that allowed its cars from the street. The company sent shockwaves across London when it declared it would shut down its UK operations from 1 January.
It will mean many helpers cannot pick up supplies from a major food charity, which gathers excess produce from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, more expensive, or do not offer the same convenient access.
“It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by the operational hurdle we will face. Many groups like ours are going to struggle.”
“Knowing the reality, everyone is concerned and thinking: ‘How will we continue?’”
A Major Blow for Urban Car-Sharing
The community kitchen’s drivers are among more than half a million people in London registered as car club members, now potentially left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those members were likely with Zipcar, which had a near-monopoly position in the city.
This shutdown, pending consultation with employees, is a serious setback to hopes that car sharing in urban areas could cut the need for owning a car. However, 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 green advocates as a way of reducing the ills associated with vehicle ownership. Most cars sit as two-tonne dead weights on the street for the vast majority of the time, occupying parking. They also involve large CO2 output to produce, and people who do not own cars tend to walk, cycle and take transit more. That helps urban areas – reducing congestion and pollution – and boosts people’s health through more exercise.
Understanding the Decline
Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its owner's overall annual revenue, and a deficit that grew to £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, enhance profitability”.
Its latest financial reports said revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the ongoing impact of the economic squeeze, which continues to suppress demand for discretionary spending,” it said.
The Capital's Specific Challenges
Yet, several experts noted that London has particular issues that made it much harder for the sector to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of different procedures and prices that complicate operations.
- Congestion Charge: The closure coincides with electric cars start paying 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 per year, creating a major disincentive.
“Our fees should be one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”
Lessons from Abroad
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 5.4 shared cars per 10,000 people, while France has 2.1 and Belgium has 6.3. The UK trails at 0.7.
“The evidence shows is that shared mobility 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 a potential operator was looking at entering the London market: “Operators will fill this gap.”
The Future Landscape
The company’s competitors can roughly be divided into two models:
- Fleet Operators: Which maintain their own cars. This includes 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. 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. “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. For now, more people may feel forced to buy cars, and many across London will be without a convenient option.
For the volunteers in Rotherhithe, the next month will be a scramble to find a solution. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on community groups and the prospects of shared mobility in the UK.
