What Has Gone Wrong at Zipcar – Is the UK Vehicle-Sharing Market Dead?
A community kitchen in Rotherhithe has provided hundreds of prepared dishes each week for two years to elderly residents and vulnerable locals in southeast London. However, their operations have been thrown into disarray by the announcement that they will lose use of New Year’s Day.
This organization had relied on Zipcar, the car-sharing company that customers to access its cars from the street. It sent shockwaves through the capital when it declared it would cease its UK business from 1 January.
This means many helpers cannot pick up supplies from a major food charity, which gathers excess produce from grocery stores, cafes and restaurants. Other options are less convenient, costlier, or lack the same convenient access.
“It’s going to be affected massively,” said Vimal Pandya, the project's founder. “My team and I are worried about the logistical challenge 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 among more than half a million people in London who were car club members, who could be left without easy use to vehicles, avoiding the burden and cost of ownership. The vast majority of those people were likely with Zipcar, which held a dominant position in the city.
The planned closure, pending consultation with staff, is a big blow to hopes that vehicle clubs in cities could reduce the need for owning a car. Yet, some experts also suggested that Zipcar’s departure need not spell the end for the concept in Britain.
The Potential of Car Sharing
Car sharing is valued by city planners and environmentalists as a way of reducing the problems associated with vehicle ownership. Typically, vehicles sit idle on the side of the road for the vast majority of the time, occupying parking. They also require large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take transit more. That benefits cities – easing congestion and pollution – and boosts 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 income barely registered compared with its owner's total earnings, and a deficit that reached £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 targeted actions to simplify processes, enhance profitability”.
Zipcar’s most recent accounts noted revenues had declined as drivers took fewer and shorter trips. “These changes reflect the ongoing impact of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said.
The Capital's Specific Challenges
However, industry observers noted that London has particular issues that made it much harder for the sector to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of different procedures and costs that complicate operations.
- Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding unavoidable costs.
- Unequal Parking Fees: Locals 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 major disincentive.
“We should literally be charged one-twentieth of a private parking cost,” argued 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 enacted national shared mobility laws in 2017, providing a unified system for parking, subsidies 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 lags behind at 0.7.
“What we see is that car sharing around the world, particularly on the continent, is expanding,” commented 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 one unnamed client was looking at entering the London market: “Operators will fill this gap.”
The Future Landscape
Other players can be split into two models:
- Company-Owned Fleets: Which own or lease their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Peer-to-Peer Services: Which allow users to hire 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 head, 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.
However, it could take a while for other players to establish themselves. In the meantime, more people may feel forced to buy cars, and others 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 wider implications of its departure on community groups and the future of shared mobility in the UK.
