What Has Gone Wrong at Zipcar – and the UK Car-Sharing Sector Dead?
The community kitchen in Rotherhithe has been delivering hundreds of prepared dishes weekly for two years to elderly residents and vulnerable locals in southeast London. However, their operations face major disruption by the announcement that they will not have cars and vans on New Year’s Day.
The group had relied on Zipcar, the car-sharing company that allowed 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 helpers will be unable to pick up supplies from the Felix Project, which gathers excess produce from grocery stores, cafes and restaurants. Obvious alternatives 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. “Personally me and my team are worried about the logistical challenge we will face. Many groups like ours will face difficulties.”
“Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?”
A Major Blow for Urban Car-Sharing
These volunteers are part of more than half a million people in London registered as car club members, who could be left without easy use to vehicles, avoiding the burden and cost of ownership. The vast majority of those members were probably 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 reduce the need for owning a car. Yet, some experts also suggested that Zipcar’s departure need not mean the demise for the concept in Britain.
The Promise of Shared Mobility
Car sharing is prized by city planners and green advocates as a way of mitigating the ills associated with vehicle ownership. Most cars sit idle on the side of the road for the vast majority of the time, occupying parking. 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 helps urban areas – reducing congestion and pollution – and improves public 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 deficit that grew to £11.7m in 2024 gave little incentive to continue.
Avis Budget has said the closure is part of a “broader transformation across our international business, where we are taking deliberate steps to simplify processes, improve returns”.
Zipcar’s most recent accounts said revenues had fallen as drivers took less frequent, 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
Yet, industry observers noted that London has specific problems that made it difficult for the sector to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of varying processes and prices that made it harder.
- Congestion Charge: The closure comes as 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 per year, creating a major disincentive.
“We should literally be charged one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”
A European Example
Other European countries offer models for London to follow. Germany enacted national shared mobility laws in 2017, providing a nationwide framework for parking, subsidies and exemptions. Now, the country has 5.4 shared cars per 10,000 people, while France has 2.1 and Belgium has 6.3. The UK lags behind at 0.7.
“The evidence shows is that shared mobility around the world, especially in Europe, is expanding,” commented Bharath Devanathan of Invers.
He suggested authorities should start to view vehicle clubs 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.”
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.
- 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 managing director, 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 some time for other players to establish themselves. In the meantime, more people may choose to buy cars, and many across London will be without a convenient option.
For the volunteers in Rotherhithe, the coming weeks will be a rush to find a solution. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of car-sharing in the UK.