What Has Gone Awry at Zipcar – Is the UK Vehicle-Sharing Sector Finished?
A volunteer food project in Rotherhithe has provided hundreds of prepared dishes weekly for the past two years to elderly residents and vulnerable locals in southeast London. Yet, the group's plans face major disruption by the announcement that they will lose access to New Year’s Day.
This organization had relied on Zipcar, the car-sharing company that allowed its cars from the street. It sent shockwaves through the capital when it said it would cease its UK business from 1 January.
It will mean many helpers will be unable to collect food from a major food charity, which gathers excess produce from grocery stores, cafes and restaurants. Obvious alternatives are further away, costlier, or lack 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 will face difficulties.”
“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 who were car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those members were likely with Zipcar, which held a dominant position in the city.
The planned closure, pending consultation with employees, is a big blow to hopes that vehicle clubs in urban areas could reduce the need for private vehicle ownership. However, some analysts also suggested that Zipcar’s exit need not mean the demise for the idea in Britain.
The Potential of Shared Mobility
Car sharing is prized by many urbanists and green advocates as a way of mitigating the ills associated with vehicle ownership. Most cars sit as two-tonne dead weights on the street for 95% 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 – reducing congestion and pollution – and improves people’s health through increased activity.
What Went Wrong?
The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered 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 “wider restructuring across our global operations, where we are taking deliberate steps to streamline operations, improve returns”.
Zipcar’s most recent accounts noted revenues had declined as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which continues to suppress demand for discretionary spending,” it said.
London's Unique Challenges
However, several experts noted that London has specific problems that made it difficult for the sector to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a mosaic of different procedures and prices that complicate operations.
- New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Residents in some boroughs pay as little as £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a significant barrier.
“Our fees should be one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.”
A European Example
Nations in Europe offer models for London to follow. Germany introduced national car-sharing legislation in 2017, providing a unified system for parking, support 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 trails 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 treat car sharing as a form of public transport, and integrate it with train and bus stations. He added that one unnamed client was looking at entering the London market: “There will be fill this gap.”
The Future Landscape
The company’s competitors can roughly be divided 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 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.
One company, a US-headquartered P2P service, is already weighing up the UK gap. Rory Brimmer, its UK head, said there was a “big opportunity” 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 choose to buy cars, and others across London will be without a convenient option.
For Rotherhithe community kitchen, the next month will be a rush to find a solution. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of car-sharing in the UK.
