What Has Gone So Wrong at Zipcar – Is the UK Car-Sharing Sector Finished?
The community kitchen in Rotherhithe has been delivering hundreds of prepared dishes each week for the past two years to elderly residents and needy locals in southeast London. However, the group's plans face major disruption by the news that they will not have access to New Year’s Day.
This organization depended on Zipcar, the app-based vehicle rental service that allowed its cars from the street. It sent shockwaves across London when it declared it would shut down its UK operations from 1 January.
It will mean many volunteers cannot pick up supplies from a major food charity, that collects excess produce from supermarkets, cafes and restaurants. Other options are less convenient, more expensive, or lack the same convenient access.
“It’s going to be affected massively,” stated Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the logistical challenge we will face. Many groups like ours will face difficulties.”
“Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?”
A Significant Setback for City Vehicle Clubs
These volunteers are among more than half a million people in London who were car club members, now potentially left without easy use to vehicles, avoiding the burden and cost of ownership. Most of those members were likely with Zipcar, which had a near-monopoly position in the city.
This shutdown, subject to consultation with employees, is a big blow to the vision that car sharing in urban areas could reduce the need for owning a car. Yet, some experts also suggested that Zipcar’s exit need not mean the demise for the concept in Britain.
The Promise of Car Sharing
Car sharing is prized by many urbanists and environmentalists as a way of reducing the problems linked to vehicle ownership. Typically, vehicles sit as two-tonne dead weights 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 – easing congestion and pollution – and improves public health through more exercise.
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 parent company's total earnings, and a deficit that grew to £11.7m in 2024 gave no reason to continue.
Avis Budget has said the closure is part of a “broader transformation across our global operations, where we are taking deliberate steps to streamline operations, improve returns”.
Zipcar’s most recent accounts said revenues had fallen as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the economic squeeze, which is dampening demand for non-essential services,” it said.
The Capital's Specific Hurdles
However, several experts 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 patchwork of varying processes and costs that complicate operations.
- New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding unavoidable costs.
- Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a significant barrier.
“Our fees should be one-twentieth of a private parking cost,” argued Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”
A European Example
Nations in Europe offer models for London to follow. Germany enacted national shared mobility laws in 2017, providing a unified system for parking, subsidies 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 trails at 0.7.
“The evidence shows is that car sharing around the world, particularly on the continent, is expanding,” said Bharath Devanathan of Invers.
Devanathan said authorities should start to treat car sharing as a form of mass transit, and integrate it with train and bus stations. He added that a potential operator was already seriously considering 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 maintain their own cars. Examples 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.
Turo, a US-headquartered peer-to-peer platform, 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.
However, it could take some time for other players to build momentum. For now, more people may choose to buy cars, and many across London will be left without access.
For Rotherhithe community kitchen, the next month will be a scramble to find a way. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the future of shared mobility in the UK.