What Exactly Has Gone So Awry at Zipcar – Is the UK Vehicle-Sharing Sector Dead?
A community kitchen in Rotherhithe has distributed hundreds of prepared dishes weekly for the past two years to pensioners and needy locals in southeast London. Yet, the group's plans have been thrown into disarray by the announcement that they will lose access to New Year’s Day.
The group had relied on Zipcar, the app-based vehicle rental service that allowed its cars from the street. It caused shock through the capital when it declared it would shut down its UK operations from 1 January.
It will mean many volunteers will be unable to collect food from a major food charity, that collects excess produce from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, more expensive, or lack the same convenient access.
“It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the operational hurdle we will face. Many groups like ours are going to struggle.”
“Faced with this reality, everyone is concerned and thinking: ‘How will we continue?’”
A Significant Setback for Urban Car-Sharing
These volunteers are part of more than half a million people in London who were car club members, now potentially left without convenient access to vehicles, without the hassle and cost of ownership. Most of those people were probably with Zipcar, which had a near-monopoly position in the city.
The planned closure, subject to consultation with staff, is a serious setback to hopes that car sharing in cities could reduce the need for private vehicle ownership. Yet, some analysts have noted that Zipcar’s departure need not spell the end for the idea in Britain.
The Potential of Shared Mobility
Car sharing is prized by many urbanists and green advocates as a way of reducing the problems linked to vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the side of the road for the vast majority of the time, occupying parking. They also require large carbon emissions to produce, and people without a vehicle tend to use active travel and take public transport more. That helps urban areas – reducing congestion and pollution – and improves people’s health through more exercise.
Understanding the Decline
Zipcar was founded in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its parent company'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 international business, where we are taking targeted actions to streamline operations, enhance profitability”.
Zipcar’s most recent accounts said revenues had fallen as drivers took less frequent, shorter trips. “This trend reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said.
The Capital's Specific Hurdles
However, industry observers noted that London has specific problems that made it much harder for the company and its rivals to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of varying processes and prices that made it harder.
- Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 annually, 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’re putting less polluting cars 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 nationwide framework for parking, support 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 lags behind at 0.7.
“What we see is that car sharing around the world, particularly on the continent, is expanding,” said 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 already seriously considering entering the London market: “Operators will fill this gap.”
What Comes Next?
Other players can roughly be divided into two models:
- Fleet Operators: Which own or lease their own cars. Examples 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. Examples 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 “significant chance” 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 a while for other players to build momentum. In the meantime, more people may feel forced to buy cars, and many across London will be without a convenient option.
For the volunteers in Rotherhithe, 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 community groups and the prospects of shared mobility in the UK.