What Exactly Has Gone Awry at Zipcar – Is the UK Vehicle-Sharing Sector Dead?
The volunteer food project in Rotherhithe has distributed a large number of cooked meals weekly for two years to pensioners and needy locals in south London. Yet, their operations have been thrown into disarray by the news that they will not have use of New Year’s Day.
This organization depended on Zipcar, the car-sharing company that allowed its fleet of vehicles via smartphone. The company caused shock through the capital when it said it would cease its UK business from 1 January.
It will mean many volunteers cannot collect food from a major food charity, which gathers surplus food from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, more expensive, or do not offer the same flexible hours.
“It’s going to be affected massively,” stated Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the operational hurdle we will face. A lot of people 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 who were car club members, who could be left without convenient access 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.
This shutdown, subject to consultation with staff, is a big blow to hopes that vehicle clubs in urban areas could cut the need for owning a car. However, some experts have noted that Zipcar’s exit need not mean the demise for the concept in Britain.
The Potential of Car Sharing
Car sharing is prized by city planners and environmentalists as a way of mitigating the problems linked to vehicle ownership. Most cars sit idle on the street for 95% of the time, using up space. They also involve large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take transit more. That helps urban areas – easing congestion and pollution – and boosts people’s health through more exercise.
What Went Wrong?
Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its owner'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 “wider restructuring across our international business, where we are taking deliberate steps to simplify processes, improve returns”.
Zipcar’s most recent accounts noted revenues had declined as drivers took fewer and shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which continues to suppress demand for discretionary spending,” it said.
London's Unique Challenges
Yet, industry observers noted that London has specific problems that made it difficult for the sector to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a mosaic of different procedures 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: 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 per year, creating a major disincentive.
“We should literally be charged one-twentieth of a resident’s permit,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. 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 exemptions. 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,” said Bharath Devanathan of Invers.
He suggested authorities should start to view vehicle clubs as a form of mass transit, and link it with train and bus stations. He added that a potential operator 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:
- Company-Owned Fleets: Which maintain their own cars. This includes 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 – a kind of Airbnb for cars. Players include 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 “significant chance” to win more users. “A space exists 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 left without access.
For the volunteers in Rotherhithe, the next month will be a rush to find a solution. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the prospects of shared mobility in the UK.
