What Has Gone Wrong at Zipcar – Is the UK Car-Sharing Market Dead?
A community kitchen in Rotherhithe has distributed a large number of cooked meals 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.
The group depended on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles via smartphone. The company caused shock across London when it declared it would shut down its UK operations from 1 January.
This means many helpers cannot collect food from a major food charity, which gathers surplus food from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, costlier, or do not offer the same flexible hours.
“The impact will be massively,” stated 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.”
“Faced with this reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Significant Setback for Urban Car-Sharing
These volunteers are part of over 500,000 people in London registered as car club members, now potentially left without easy use to vehicles, without the hassle and cost of ownership. Most of those members were probably with Zipcar, which had a near-monopoly 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. However, some experts have noted that Zipcar’s exit need not spell the end for the idea in Britain.
The Promise of Shared Mobility
Car sharing is valued by many urbanists and environmentalists as a way of reducing the problems associated with vehicle ownership. Most cars sit idle on the street for the vast majority of the time, occupying parking. They also involve large CO2 output to produce, and people who do not own cars tend to use active travel and take transit more. That benefits cities – reducing congestion and pollution – and improves public health through increased activity.
Understanding the Decline
The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's overall annual revenue, and a loss that grew to £11.7m in 2024 gave little incentive 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 streamline operations, enhance profitability”.
Zipcar’s most recent accounts noted revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said.
London's Unique Challenges
Yet, industry observers noted that London has particular issues that made it difficult for the sector to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a mosaic of different procedures and costs that made it harder.
- Congestion Charge: The closure comes as electric cars start paying London’s congestion charge, adding unavoidable costs.
- Unequal Parking Fees: Locals 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 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.”
Lessons from Abroad
Other European countries offer models for London to follow. Germany enacted national shared mobility laws in 2017, providing a unified system for parking, support 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.
“The evidence shows is that shared mobility around the world, especially in Europe, 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 looking at entering the London market: “There will be fill this gap.”
The Future Landscape
Other players can be split 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. Examples 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 “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.
Yet, it could take a while for other players to build momentum. For now, more people may choose to buy cars, and many across London will be without a convenient option.
For Rotherhithe community kitchen, the coming weeks will be a rush to find a way. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the future of shared mobility in the UK.
