What Has Gone So Wrong at Zipcar – and the UK Vehicle-Sharing Market Finished?
The volunteer food project in Rotherhithe has been delivering hundreds of cooked meals weekly for the past two years to elderly residents and vulnerable locals in south London. Yet, their operations face major disruption by the announcement that they will lose use of New Year’s Day.
This organization depended on Zipcar, the app-based vehicle rental service that allowed 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 helpers will be unable to pick up supplies from a major food charity, which gathers excess produce from grocery stores, cafes and restaurants. Obvious alternatives are further away, costlier, or do not offer the same convenient access.
“The impact will be 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 Significant Setback for City Vehicle Clubs
The community kitchen’s drivers are part of more than half a million people in London registered as car club members, now potentially left without convenient access to vehicles, without the hassle and cost of ownership. The vast majority of those members were probably with Zipcar, which held a dominant position in the city.
This shutdown, subject to consultation with employees, is a big blow to the vision that car sharing in urban areas could cut the need for private vehicle ownership. However, some analysts have noted that Zipcar’s departure need not mean the demise for the concept in Britain.
The Potential of Shared Mobility
Car sharing is valued by city planners and environmentalists as a way of reducing the ills associated with vehicle ownership. Most cars sit idle on the side of the road for 95% of the time, using up space. They also require large carbon emissions to produce, and people without a vehicle tend to use active travel and take transit more. That helps urban areas – easing congestion and pollution – and improves people’s health through more exercise.
Understanding the Decline
Zipcar was founded in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its parent company's total earnings, 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, improve returns”.
Its latest financial reports said revenues had declined as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which continues to suppress demand for non-essential services,” it said.
London's Unique Hurdles
Yet, several experts noted that London has particular issues that made it difficult for the company and its rivals to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of varying processes and costs that complicate operations.
- Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding extra expenses.
- Parking Permit Disparity: Locals 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 annually, creating a major disincentive.
“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
Other European countries offer examples for London to follow. Germany introduced national shared mobility laws in 2017, providing a unified system for parking, support and waivers. 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.
“What we see is that car sharing around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers.
Devanathan said 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.”
What Comes Next?
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.
- 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.
One company, a US-headquartered P2P service, 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.
Yet, it could take some time for other players to establish themselves. In the meantime, more people may feel forced 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 logistical challenge caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the future of shared mobility in the UK.
