What Has Gone 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 needy locals in south London. However, their operations have been thrown into disarray by the announcement that they will lose access to New Year’s Day.
This organization depended on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles via smartphone. It sent shockwaves across London when it said it would shut down its UK operations from 1 January.
It will mean many helpers will be unable to pick up supplies from a major food charity, which gathers surplus food from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, costlier, or do not offer the same flexible hours.
“The impact will be massively,” stated Vimal Pandya, the project's founder. “Personally me and my team are worried about the operational hurdle we will face. Many groups like ours will face difficulties.”
“Faced with this reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Major Blow for Urban Car-Sharing
These volunteers are part of over 500,000 people in London who were car club members, who could be left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those people were probably with Zipcar, which held a dominant position in the city.
This shutdown, pending consultation with employees, is a big blow to hopes 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 mean the demise for the concept in Britain.
The Potential of Car Sharing
Car sharing is valued by many urbanists and environmentalists as a way of mitigating the problems linked to vehicle ownership. Typically, vehicles sit idle on the street for the vast majority of the time, using up space. They also require large carbon emissions to produce, and people who do not own cars tend to use active travel 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 being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK income were minimal compared with its parent company's overall annual revenue, 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 global operations, where we are taking targeted actions to simplify processes, enhance profitability”.
Zipcar’s most recent accounts noted revenues had declined as drivers took fewer and shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which continues to suppress demand for non-essential services,” it said.
London's Unique Hurdles
Yet, several experts noted that London has specific problems that made it much harder for the sector to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a mosaic of varying processes and prices that complicate operations.
- Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
- Parking Permit Disparity: Locals in some boroughs pay just £63 for a year’s 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 private parking cost,” 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 car-sharing legislation in 2017, providing a nationwide framework for parking, support and waivers. Now, the country has 5.4 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 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 one unnamed client was looking at entering the London market: “Operators will fill this gap.”
The Future Landscape
Other players can be split into two camps:
- 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 rent out their own vehicles via an app – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.
Turo, a US-headquartered P2P service, is already weighing up 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 some time for other players to build momentum. For now, more people may choose to buy cars, and many across London will be without a convenient option.
For Rotherhithe community kitchen, the coming weeks will be a scramble to find a way. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on vital services and the prospects of shared mobility in the UK.
