What Exactly Has Gone Wrong at Zipcar – and the UK Car-Sharing Sector Dead?
The volunteer food project in Rotherhithe has provided hundreds of cooked meals each week for two years to elderly residents and vulnerable locals in south London. Yet, the group's plans face major disruption by the announcement that they will lose access to New Year’s Day.
The group depended on Zipcar, the car-sharing company that customers to access its cars from the street. The company caused shock across London when it said it would cease its UK operations from 1 January.
It will mean many volunteers cannot pick up supplies from the Felix Project, which gathers excess produce from grocery stores, cafes and restaurants. Other options are less convenient, costlier, or lack the same convenient access.
“The impact will be 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.”
“Faced with this reality, they are all worried and thinking: ‘How will we continue?’”
A Major Blow for Urban Car-Sharing
These volunteers are among over 500,000 people in London registered as car club members, now potentially left without easy use to vehicles, avoiding the burden and cost of ownership. Most of those members were probably with Zipcar, which held a dominant position in the city.
The planned closure, pending consultation with employees, is a serious setback to hopes that vehicle clubs in urban areas could cut the need for private vehicle ownership. However, some experts also suggested that Zipcar’s departure need not spell the end for the concept in Britain.
The Potential of Shared Mobility
Car sharing is valued by many urbanists and environmentalists as a way of reducing the ills linked to vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for 95% 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 benefits cities – reducing congestion and pollution – and boosts public health through more exercise.
What Went Wrong?
The company started in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK income were minimal compared with its parent company's overall annual revenue, and a loss that reached £11.7m in 2024 gave little incentive 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, 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 is dampening demand for discretionary spending,” it said.
The Capital's Specific Hurdles
Yet, industry observers noted that London has particular issues that made it much harder for the sector to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of varying processes and costs that complicate operations.
- Congestion Charge: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Parking Permit Disparity: 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 annually, creating a significant barrier.
“Our fees should be one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models in their place.”
A European Example
Nations in Europe offer examples for London to follow. Germany enacted national car-sharing legislation in 2017, providing a unified system 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 trails at 0.7.
“The evidence shows is that shared mobility around the world, especially in Europe, is growing,” said Bharath Devanathan of Invers.
He suggested authorities should start to view vehicle clubs as a form of public transport, and link it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “There will be fill this gap.”
The Future Landscape
Other players can be split into two models:
- 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 rent out their own vehicles via an app – similar to Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.
One company, 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.
Yet, it could take some time for other players to establish themselves. In the meantime, more people may choose to buy cars, and many across London will be left without access.
For Rotherhithe community kitchen, the next month will be a scramble to find a way. 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.
