What Exactly Has Gone Wrong at Zipcar – Is the UK Vehicle-Sharing Sector Dead?
A volunteer food project in Rotherhithe has provided a large number of cooked meals each week for two years to pensioners and needy locals in south London. Yet, their operations face major disruption by the news 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 cars via smartphone. It sent shockwaves across London when it said it would shut down its UK business from 1 January.
It will mean many volunteers cannot pick up supplies from the Felix Project, which gathers surplus food from grocery stores, cafes and restaurants. Obvious alternatives are further away, costlier, or do not offer the same flexible hours.
“The impact will be massively,” stated Vimal Pandya, the community kitchen’s founder. “Personally me and my team are worried about the logistical challenge we will face. Many groups like ours are going to struggle.”
“Knowing the reality, they are all worried and thinking: ‘How will we continue?’”
A Major Blow for Urban Car-Sharing
The community kitchen’s drivers are part of over 500,000 people in London registered as car club members, who could be left without easy use 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 serious setback to hopes that vehicle clubs in urban areas could reduce the need for private vehicle ownership. Yet, some experts also suggested that Zipcar’s departure need not mean the demise for the concept in Britain.
The Potential of Shared Mobility
Shared vehicle use is valued 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 side of the road for the vast majority of the time, using up space. They also involve large carbon emissions to produce, and people who do not own cars tend to use active travel and take transit more. That benefits cities – reducing congestion and pollution – and improves public health through increased activity.
What Went Wrong?
The company started in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues 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.
Avis Budget has said the closure is part of a “broader transformation across our global operations, where we are taking deliberate steps to simplify processes, enhance profitability”.
Zipcar’s most recent accounts noted revenues had declined as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the economic squeeze, which continues to suppress demand for discretionary spending,” it said.
The Capital's Specific Challenges
However, several experts noted that London has particular issues that made it much harder for the company and its rivals to succeed.
- Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of varying processes and prices that made it harder.
- New Costs: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Parking Permit Disparity: Residents in some boroughs pay just £63 for a annual electric car parking permit. A floating car club would pay over £1,100 per year, creating a significant barrier.
“Our fees should be one-twentieth of a resident’s permit,” said Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”
Lessons from Abroad
Nations in Europe offer models for London to follow. Germany introduced national car-sharing legislation in 2017, providing a nationwide framework 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 trails at 0.7.
“What we see is that shared mobility around the world, especially in Europe, is expanding,” 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
Other players can roughly be divided into two camps:
- Fleet Operators: Which own or lease their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Peer-to-Peer Services: 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 peer-to-peer platform, is already weighing up the UK gap. Rory Brimmer, its UK head, 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 a while for other players to build momentum. In the meantime, more people may feel forced to buy cars, and others across London will be without a convenient option.
For the volunteers in Rotherhithe, the next month will be a scramble to find a way. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on community groups and the prospects of car-sharing in the UK.