What Has Gone So Awry at Zipcar – and the UK Car-Sharing Market Finished?
A volunteer food project in Rotherhithe has been delivering a large number of cooked meals each week for two years to pensioners and vulnerable locals in south London. However, the group's plans have been thrown into disarray by the news that they will not have use of New Year’s Day.
The group depended on Zipcar, the car-sharing company that customers to access its fleet of vehicles via smartphone. It sent shockwaves through the capital when it declared it would shut down its UK business from 1 January.
It will mean many volunteers cannot pick up supplies from the Felix Project, that collects surplus food from supermarkets, 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,” stated Vimal Pandya, the community kitchen’s founder. “My team and I are worried about 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
The community kitchen’s drivers are part of over 500,000 people in London registered as car club members, who could be left without convenient access 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.
The planned closure, pending consultation with employees, is a big blow to the vision that vehicle clubs in urban areas could cut the need for private vehicle ownership. Yet, some analysts have noted that Zipcar’s exit need not mean the demise for the concept in Britain.
The Promise of Shared Mobility
Car sharing is valued by city planners and green advocates as a way of reducing the ills linked to 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 walk, cycle and take transit more. That helps urban areas – reducing congestion and pollution – and boosts people’s health through more exercise.
Understanding the Decline
Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK income were minimal compared with its parent company's total earnings, and a loss that reached £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 simplify processes, improve returns”.
Its latest financial reports said revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the ongoing impact of the economic squeeze, which is dampening demand for discretionary spending,” it said.
London's Unique Hurdles
However, several experts noted that London has specific problems that made it much harder for the company and its rivals to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of different procedures and prices that made it harder.
- Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- 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.
“Our fees should be one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”
Lessons from Abroad
Other European countries offer models for London to follow. Germany introduced national shared mobility laws in 2017, providing a nationwide framework for parking, support 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 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 public transport, and integrate 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 be split into two camps:
- Fleet Operators: 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 rent out their own vehicles via an app – similar to Airbnb for cars. Examples 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.
Yet, it could take a while for other players to build momentum. In the meantime, more people may choose to buy cars, and many across London will be left without access.
For the volunteers in Rotherhithe, the coming weeks will be a scramble to find a solution. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the future of shared mobility in the UK.
