What Exactly Has Gone So Awry at Zipcar – and the UK Vehicle-Sharing Market Finished?
A community kitchen in Rotherhithe has provided hundreds of cooked meals weekly for the past two years to elderly residents and vulnerable locals in south London. However, their operations face major disruption by the announcement that they will lose access to New Year’s Day.
This organization depended on Zipcar, the car-sharing company that allowed its cars via smartphone. It sent shockwaves through the capital when it declared it would shut down its UK business from 1 January.
This means many helpers will be unable to pick up supplies from the Felix Project, which gathers surplus food from grocery stores, cafes and restaurants. Obvious alternatives are further away, costlier, or do not offer the same convenient access.
“It’s going to be affected massively,” stated Vimal Pandya, the community kitchen’s founder. “Personally me and my team are worried about the operational hurdle we will face. A lot of people like ours will face difficulties.”
“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 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. Most of those members were likely with Zipcar, which had a near-monopoly position in the city.
This shutdown, pending consultation with staff, is a big blow to the vision that car sharing in cities could cut the need for private vehicle ownership. Yet, some experts also suggested that Zipcar’s departure need not spell the end for the concept in Britain.
The Potential of Shared Mobility
Car sharing is prized by city planners and green advocates as a way of reducing the ills associated with vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for 95% of the time, using up space. They also require large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take transit more. That helps urban areas – easing congestion and pollution – and improves people’s health through more exercise.
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 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 “broader transformation across our global operations, where we are taking deliberate steps to streamline operations, enhance profitability”.
Its latest financial reports said revenues had declined as drivers took fewer and shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for discretionary spending,” it said.
The Capital's Specific Hurdles
Yet, several experts noted that London has particular issues 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 costs that complicate operations.
- New Costs: The closure comes as electric cars becoming liable for London’s congestion charge, adding extra expenses.
- Parking Permit Disparity: Residents in some boroughs pay just £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 resident’s permit,” 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 models for London to follow. Germany enacted national car-sharing legislation in 2017, providing a unified system 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 trails at 0.7.
“What we see is that car sharing 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 public transport, and link it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “There will be fill this gap.”
What Comes Next?
Other players can roughly be divided into two camps:
- Company-Owned Fleets: Which maintain their own cars. Examples 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. Players include Britain’s Hiyacar and the US’s Getaround and Turo.
One company, a US-headquartered peer-to-peer platform, is assessing the UK gap. Rory Brimmer, its UK managing director, said there was a “big opportunity” to win more users. “A space exists 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 establish themselves. For now, more people may choose to buy cars, and many across London will be without a convenient option.
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 future of shared mobility in the UK.
