What Exactly Has Gone So Wrong at Zipcar – Is the UK Car-Sharing Sector Dead?
The community kitchen in Rotherhithe has provided a large number of cooked meals weekly for the past two years to elderly residents and needy locals in south London. Yet, the group's plans have been thrown into disarray by the news that they will not have cars and vans on New Year’s Day.
The group depended on Zipcar, the car-sharing company that allowed its cars from the street. It sent shockwaves through the capital when it said it would cease its UK business from 1 January.
This means many helpers cannot pick up supplies from a major food charity, which gathers surplus food 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,” said Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by the operational hurdle we will face. A lot of people like ours will face difficulties.”
“Knowing the reality, they are all worried 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 registered as car club members, who could be left without convenient access to vehicles, without the hassle and cost of ownership. The vast majority of those members were likely with Zipcar, which held a dominant position in the city.
The planned closure, pending consultation with employees, is a serious setback to hopes that car sharing in cities could cut the need for private vehicle ownership. However, some analysts have noted that Zipcar’s departure need not spell the end for the idea in Britain.
The Potential of Shared Mobility
Shared vehicle use is valued by many urbanists and green advocates as a way of mitigating the ills linked to vehicle ownership. Typically, vehicles sit idle on the side of the road for 95% of the time, using up space. They also require large CO2 output to produce, and people who do not own cars tend to walk, cycle and take transit more. That benefits cities – reducing congestion and pollution – and boosts public health through more exercise.
What Went Wrong?
Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its owner's overall annual revenue, and a deficit that grew to £11.7m in 2024 gave little incentive to continue.
The parent company stated the closure is part of a “wider restructuring across our international business, where we are taking deliberate steps to streamline operations, enhance profitability”.
Zipcar’s most recent accounts noted revenues had fallen as drivers took less frequent, 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 Hurdles
Yet, industry observers noted that London has particular issues that made it difficult for the company and its rivals to succeed.
- Inconsistent Rules: Across 33 boroughs, car-club operators face a patchwork of different procedures 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 annual electric car parking permit. A floating car club would pay over £1,100 per year, creating a significant barrier.
“We should literally be charged one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”
A European Example
Other European countries offer examples for London to follow. Germany introduced national car-sharing legislation in 2017, providing a nationwide framework 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 shared mobility around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers.
Devanathan said authorities should start to treat car sharing as a form of mass transit, and link it with train and bus stations. He added that a potential operator was looking at entering the London market: “There will be fill this gap.”
What Comes Next?
Other players can roughly be divided into two models:
- Company-Owned Fleets: Which own or lease their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Person-to-Person Rentals: 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 “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 some time for other players to establish themselves. In the meantime, more people may feel forced to buy cars, and others across London will be without a convenient option.
For the volunteers in Rotherhithe, the next month will be a scramble to find a solution. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on community groups and the future of car-sharing in the UK.
