What Exactly Has Gone Wrong at Zipcar – Is the UK Car-Sharing Sector Finished?
A community kitchen in Rotherhithe has been delivering a large number of cooked meals weekly for two years to pensioners and needy locals in southeast London. However, the group's plans 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 fleet of vehicles from the street. It caused shock through the capital when it said it would cease its UK business from 1 January.
This means many helpers cannot pick up supplies from the Felix Project, which gathers excess produce from grocery stores, cafes and restaurants. Other options are less convenient, more expensive, or do not offer the same convenient access.
“It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the logistical challenge we will face. A lot of people like ours will face difficulties.”
“Faced with this reality, everyone is concerned 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 registered as car club members, now potentially left without easy use to vehicles, avoiding the burden and cost of ownership. Most of those people were probably with Zipcar, which held a dominant position in the city.
This shutdown, subject to consultation with staff, is a serious setback to the vision that vehicle clubs in urban areas could reduce the need for private vehicle ownership. Yet, some experts have noted that Zipcar’s departure need not mean the demise for the idea in Britain.
The Potential of Car Sharing
Shared vehicle use is prized by many urbanists and green advocates as a way of mitigating the ills linked to vehicle ownership. Most cars sit idle on the street for the vast majority of the time, using up space. They also require large CO2 output to produce, and people without a vehicle tend to walk, cycle and take transit more. That helps urban areas – reducing congestion and pollution – and improves people’s health through more exercise.
What Went Wrong?
Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's total earnings, and a deficit that reached £11.7m in 2024 gave little incentive to continue.
Avis Budget has said the closure is part of a “broader transformation across our international business, where we are taking targeted actions to streamline operations, enhance profitability”.
Zipcar’s most recent accounts noted revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which is dampening demand for non-essential services,” it said.
The Capital's Specific Hurdles
Yet, industry observers noted that London has specific problems that made it much harder for the sector to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of varying processes and prices that made it harder.
- New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Unequal Parking Fees: Residents in some boroughs pay just £63 for a annual 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 resident’s permit,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.”
Lessons from Abroad
Nations in Europe offer models for London to follow. Germany introduced 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 trails at 0.7.
“What we see is that car sharing around the world, particularly on the continent, is growing,” said Bharath Devanathan of Invers.
Devanathan said authorities should start to view vehicle clubs as a form of mass transit, and integrate it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “There will be 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 – a kind of 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.
However, it could take some time for other players to build momentum. In the meantime, more people may feel forced 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 solution. The delivery problem caused by Zipcar’s exit highlights the wider implications of its departure on community groups and the future of shared mobility in the UK.
