What Has Gone Wrong at Zipcar – and the UK Car-Sharing Sector Finished?
A volunteer food project in Rotherhithe has provided a large number of cooked meals each week for the past two years to pensioners and vulnerable locals in southeast London. However, the group's plans have been thrown into disarray by the announcement that they will not have access to New Year’s Day.
This organization depended on Zipcar, the car-sharing company that allowed its cars via smartphone. It sent shockwaves across London when it declared it would cease its UK business from 1 January.
This means many helpers cannot pick up supplies from the Felix Project, that collects excess produce from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, more expensive, or do not offer the same flexible hours.
“The impact will be massively,” stated 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 will we continue?’”
A Major Blow for City Vehicle Clubs
The community kitchen’s drivers are among more than half a million people in London who were car club members, now potentially left without convenient access to vehicles, without the hassle and cost of ownership. Most of those members were likely with Zipcar, which had a near-monopoly position in the city.
This shutdown, pending consultation with employees, is a serious setback to the vision that vehicle clubs in cities could cut the need for private vehicle ownership. Yet, some analysts have noted that Zipcar’s departure need not mean the demise for the idea in Britain.
The Potential of Shared Mobility
Shared vehicle use is prized by many urbanists and environmentalists as a way of mitigating the problems associated with vehicle ownership. Typically, vehicles sit idle on the street for the vast majority of the time, using up space. They also require large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take public transport more. That helps urban areas – reducing congestion and pollution – and improves public health through increased activity.
Understanding the Decline
The company started in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK income were minimal compared with its parent company's total earnings, and a deficit that reached £11.7m in 2024 gave no reason to continue.
Avis Budget has said the closure is part of a “broader transformation across our international business, where we are taking targeted actions to simplify processes, improve returns”.
Its latest financial reports noted revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the ongoing impact of the economic squeeze, which continues to suppress demand for non-essential services,” it said.
London's Unique Challenges
Yet, industry observers noted that London has specific problems that made it much harder for the sector to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a mosaic of varying processes and costs that complicate operations.
- New Costs: 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 annually, creating a major disincentive.
“We should literally be charged one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”
A European Example
Nations in Europe offer models for London to follow. Germany introduced national car-sharing legislation 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 lags behind at 0.7.
“What we see is that shared mobility around the world, particularly on the continent, is growing,” commented Bharath Devanathan of Invers.
He suggested authorities should start to view vehicle clubs as a form of public transport, 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 roughly be divided into two models:
- Fleet Operators: 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 hire out their own vehicles via an app – similar to Airbnb for cars. Players include 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 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 a while 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 Rotherhithe community kitchen, 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 community groups and the prospects of shared mobility in the UK.
