What Has Gone Awry at Zipcar – and the UK Car-Sharing Sector Finished?
The community kitchen in Rotherhithe has distributed a large number of prepared dishes weekly for the past two years to pensioners and needy locals in south London. However, their operations have been thrown into disarray by the announcement 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 cars via smartphone. The company sent shockwaves across London when it said it would cease its UK business from 1 January.
It will mean many volunteers will be unable to pick up supplies from the Felix Project, that collects surplus food from supermarkets, cafes and restaurants. Other options are further away, more expensive, or lack the same flexible hours.
“It’s going to be affected massively,” stated Vimal Pandya, the project's founder. “Personally me and my team are worried about the logistical challenge we will face. A lot of people 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 Urban Car-Sharing
These volunteers are among more than half a million people in London registered as car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those people were likely with Zipcar, which held a dominant position in the city.
The planned closure, subject to consultation with staff, is a big blow to the vision that car sharing in cities could reduce the need for owning a car. Yet, some experts have noted that Zipcar’s departure need not mean the demise for the idea in Britain.
The Potential of Car Sharing
Shared vehicle use is prized by many urbanists and environmentalists as a way of mitigating the ills linked to vehicle ownership. Typically, vehicles sit idle on the side of the road for the vast majority of the time, occupying parking. They also require large CO2 output 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 people’s health through increased activity.
Understanding the Decline
The company started 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 overall annual revenue, and a deficit that grew to £11.7m in 2024 gave no reason to continue.
The parent company stated the closure is part of a “broader transformation across our international business, where we are taking deliberate steps to simplify processes, improve returns”.
Zipcar’s most recent accounts noted revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said.
The Capital's Specific Challenges
However, several experts noted that London has specific problems that made it difficult for the sector to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of varying processes and prices that made it harder.
- Congestion Charge: The closure comes as electric cars start paying London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 per year, creating a major disincentive.
“Our fees should be one-twentieth of a private parking cost,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. 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 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, particularly on the continent, is expanding,” said Bharath Devanathan of Invers.
He suggested authorities should start to view vehicle clubs as a form of public transport, and link 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 be split into two camps:
- Company-Owned Fleets: 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 – 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 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.
However, 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 the volunteers in Rotherhithe, the next month will be a rush to find a solution. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on vital services and the prospects of car-sharing in the UK.
