🔗 Share this article What Has Gone Wrong at Zipcar – Is the UK Vehicle-Sharing Sector Dead? A community kitchen in Rotherhithe has distributed hundreds of cooked meals each week for the past two years to elderly residents and vulnerable locals in southeast London. However, their operations face major disruption by the announcement that they will not have cars and vans on New Year’s Day. The group depended on Zipcar, the app-based vehicle rental service that customers to access its cars via smartphone. It sent shockwaves through the capital when it declared it would cease its UK business from 1 January. It will mean many helpers cannot collect food from a major food charity, that collects excess produce from supermarkets, cafes and restaurants. Obvious alternatives are further away, more expensive, or do not offer the same flexible hours. “The impact will be massively,” said Vimal Pandya, the project's founder. “Personally me and my team are concerned by the operational hurdle we will face. Many groups like ours are going to struggle.” “Knowing the reality, everyone is concerned and thinking: ‘How are we going to carry on?” A Major Blow for City Vehicle Clubs These volunteers are among more than half a million people in London registered as car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. The vast majority of those members were likely with Zipcar, which held a dominant position in the city. This shutdown, subject to consultation with staff, is a big blow to the vision that vehicle clubs in urban areas could cut the need for owning a car. However, some analysts also suggested that Zipcar’s exit need not spell the end for the idea in Britain. The Potential of Car Sharing Shared vehicle use is prized by many urbanists and environmentalists as a way of mitigating the ills associated with vehicle ownership. Most cars 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 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 increased activity. Understanding the Decline The company started in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK income were minimal compared with its parent company's overall annual revenue, and a loss that reached £11.7m in 2024 gave no reason to continue. Avis Budget has said the closure is part of a “wider restructuring across our international business, where we are taking deliberate steps to simplify processes, enhance profitability”. Zipcar’s most recent accounts noted revenues had fallen 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 non-essential services,” it said. The Capital's Specific Challenges Yet, industry observers noted that London has specific problems that made it much harder for the company and its rivals to succeed. Patchwork Policies: Across 33 boroughs, car-club operators face a patchwork of different procedures and costs that made it harder. New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding extra expenses. Unequal Parking Fees: Locals 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 major disincentive. “Our fees should be one-twentieth of a private parking cost,” argued Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models 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 nationwide framework for parking, subsidies and exemptions. Now, the country has 5.4 shared cars per 10,000 people, while France has 2.1 and Belgium has 6.3. The UK trails at 0.7. “The evidence shows is that car sharing 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 mass transit, and link 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? 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. Person-to-Person Rentals: 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 P2P service, is already weighing up the UK gap. Rory Brimmer, its UK head, said there was a “significant chance” 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 a while for other players to build momentum. In the meantime, more people may choose to buy cars, and others across London will be left without access. For Rotherhithe community kitchen, the coming weeks will be a scramble to find a way. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the prospects of shared mobility in the UK.