What Has Gone Awry at Zipcar – and the UK Vehicle-Sharing Sector Dead?

A community kitchen in Rotherhithe has provided hundreds of cooked meals weekly for 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 car-sharing company that customers to access its cars via smartphone. The company caused shock across London when it declared it would cease its UK business from 1 January.

This means many volunteers cannot collect food from the Felix Project, which gathers excess produce from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, costlier, or do not offer the same convenient access.

“The impact will be massively,” said Vimal Pandya, the project'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

These volunteers are part of more than half a million people in London who were car club members, now potentially left without easy use to vehicles, avoiding the burden and cost of ownership. The vast majority of those members were probably with Zipcar, which had a near-monopoly position in the city.

This shutdown, subject to consultation with employees, is a big blow to hopes that vehicle clubs in urban areas could cut the need for private vehicle ownership. Yet, some analysts also suggested that Zipcar’s departure need not mean the demise for the concept in Britain.

The Promise of Shared Mobility

Shared vehicle use is prized by city planners and environmentalists as a way of mitigating the ills 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 without a vehicle tend to walk, cycle and take public transport more. That benefits cities – easing congestion and pollution – and boosts people’s health through increased activity.

Understanding the Decline

The company started in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's total earnings, and a deficit that grew to £11.7m in 2024 gave no reason to continue.

The parent company stated the closure is part of a “broader transformation across our international business, where we are taking deliberate steps to simplify processes, 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 economic squeeze, which continues to suppress demand for non-essential services,” it said.

The Capital's Specific Challenges

However, several experts noted that London has specific problems that made it difficult for the sector to succeed.

• Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of varying processes and prices that complicate operations.
• Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding extra expenses.
• Parking Permit Disparity: Residents in some boroughs pay as little as £63 for a annual electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a significant barrier.

“Our fees should be 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

Nations in Europe offer examples for London to follow. Germany enacted national shared mobility laws in 2017, providing a unified system for parking, support 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 lags behind at 0.7.

“What we see is that shared mobility around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers.

He suggested authorities should start to treat car sharing as a form of public transport, and link 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.”

What Comes Next?

The company’s competitors can be split into two camps:

1. Company-Owned Fleets: Which maintain their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. 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 P2P service, is assessing 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 a while for other players to build momentum. In the meantime, more people may choose to buy cars, and many across London will be without a convenient option.

For Rotherhithe community kitchen, the next month will be a rush to find a way. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on community groups and the prospects of shared mobility in the UK.