What Has Gone Awry at Zipcar – and the UK Vehicle-Sharing Market Finished?
The volunteer food project in Rotherhithe has provided hundreds of cooked meals weekly for the past two years to pensioners and vulnerable locals in southeast London. Yet, their operations face major disruption by the news that they will not have cars and vans on New Year’s Day.
The group had relied on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles from the street. It sent shockwaves across London when it said it would cease its UK operations from 1 January.
This means many helpers will be unable to pick up supplies from a major food charity, that collects surplus food from grocery stores, cafes and restaurants. Other options are less convenient, more expensive, or do not offer the same flexible hours.
“The impact will be massively,” stated Vimal Pandya, the project's founder. “My team and I are worried about the operational hurdle we will face. Many groups like ours are going to struggle.”
“Faced with this reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Major Blow for City Vehicle Clubs
The community kitchen’s drivers are among over 500,000 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 staff, is a big blow to the vision that car sharing in cities could cut the need for owning a car. Yet, some analysts also suggested that Zipcar’s exit need not spell the end for the idea in Britain.
The Potential of Car Sharing
Car sharing is valued by city planners and environmentalists as a way of mitigating the problems associated with vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the street for the vast majority of the time, occupying parking. They also require large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take transit more. That benefits cities – easing congestion and pollution – and boosts public health through increased activity.
Understanding the Decline
Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's total earnings, and a loss 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 targeted actions to simplify processes, enhance profitability”.
Its latest financial reports said revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the economic squeeze, which is dampening demand for discretionary spending,” it said.
London's Unique Challenges
Yet, industry observers noted that London has particular issues that made it difficult for the sector to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of different procedures and costs 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: 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 significant barrier.
“Our fees should be one-twentieth of a private parking cost,” argued Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”
Lessons from Abroad
Nations in Europe offer examples for London to follow. Germany introduced national shared mobility laws in 2017, providing a unified system for parking, subsidies 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.
“What we see is that car sharing around the world, particularly on the continent, is growing,” commented Bharath Devanathan of Invers.
Devanathan said authorities should start to treat car sharing 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.”
What Comes Next?
The company’s competitors 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 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.
Turo, 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.
Yet, it could take some time for other players to establish themselves. In the meantime, more people may feel forced to buy cars, and others across London will be without a convenient option.
For Rotherhithe community kitchen, the coming weeks will be a rush to find a way. The logistical challenge caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the future of car-sharing in the UK.
