What Exactly Has Gone So Wrong at Zipcar – and the UK Vehicle-Sharing Sector Dead?
A community kitchen in Rotherhithe has been delivering a large number of prepared dishes weekly for the past two years to pensioners and vulnerable locals in south London. However, their operations face major disruption by the news that they will not have access to New Year’s Day.
The group had relied on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles from the street. The company sent shockwaves across London when it said it would cease its UK operations from 1 January.
It will mean many helpers will be unable to pick up supplies from the Felix Project, which gathers excess produce from supermarkets, cafes and restaurants. Other options are less convenient, more expensive, or lack the same flexible hours.
“It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by 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 Significant Setback for City Vehicle Clubs
These volunteers are part of more than half a million people in London registered as car club members, now potentially left without convenient access to vehicles, without the hassle and cost of ownership. The vast majority of those members were likely with Zipcar, which had a near-monopoly position in the city.
This shutdown, subject to consultation with staff, is a big blow to hopes that vehicle clubs in cities could reduce the need for private vehicle ownership. However, some experts have noted that Zipcar’s exit need not mean the demise for the concept in Britain.
The Potential of Car Sharing
Shared vehicle use is valued by many urbanists and green advocates as a way of mitigating the problems associated with vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for 95% of the time, occupying parking. They also require large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take transit more. That helps urban areas – easing congestion and pollution – and improves people’s health through increased activity.
Understanding the Decline
Zipcar was founded in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's total earnings, 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 targeted actions to streamline operations, improve returns”.
Its latest financial reports said revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the economic squeeze, which continues to suppress 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 company and its rivals to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of varying processes and costs that made it harder.
- New Costs: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Unequal Parking Fees: Residents in some boroughs pay as little as £63 for a annual electric car parking permit. A similar shared vehicle 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’re putting less polluting cars in their place.”
Lessons from Abroad
Other European countries offer examples for London to follow. Germany enacted national car-sharing legislation in 2017, providing a unified system 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.
“The evidence shows is that car sharing around the world, particularly on the continent, is expanding,” commented Bharath Devanathan of Invers.
He suggested 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?
Other players can roughly be divided into two camps:
- Fleet Operators: 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 hire 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 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.
Yet, 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 solution. The logistical challenge caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the prospects of car-sharing in the UK.
