What Has Gone Wrong at Zipcar – and the UK Vehicle-Sharing Market Dead?
The volunteer food project in Rotherhithe has distributed hundreds of prepared dishes each week for two years to elderly residents and vulnerable locals in south London. However, their operations have been thrown into disarray by the news that they will not have use of New Year’s Day.
This organization depended on Zipcar, the car-sharing company that customers to access its cars from the street. The company sent shockwaves through the capital when it said it would cease its UK operations from 1 January.
This means many helpers will be unable to pick up supplies from the Felix Project, which gathers excess produce from grocery stores, cafes and restaurants. Obvious alternatives are further away, costlier, or do not offer the same convenient access.
“The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the logistical challenge we will face. A lot of people like ours will face difficulties.”
“Knowing the reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Major Blow 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. Most of those members were probably with Zipcar, which held a dominant position in the city.
This shutdown, subject to consultation with staff, 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 green advocates as a way of reducing the ills linked to vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the side of the road for 95% of the time, occupying parking. They also require large CO2 output to produce, and people who do not own cars tend to walk, cycle and take public transport more. That benefits cities – reducing congestion and pollution – and improves public health through more exercise.
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 barely registered compared with its parent company's overall annual revenue, and a deficit that grew to £11.7m in 2024 gave little incentive to continue.
Avis Budget has said the closure is part of a “broader transformation across our international business, where we are taking deliberate steps to simplify processes, enhance profitability”.
Its latest financial reports said revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said.
The Capital's Specific Challenges
However, several experts noted that London has particular issues that made it much harder for the sector to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a patchwork of varying processes and prices that complicate operations.
- New Costs: The closure comes as electric cars start paying 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.
“Our fees should be one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models in their place.”
Lessons from Abroad
Other European countries offer examples for London to follow. Germany enacted national shared mobility laws 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 trails at 0.7.
“What we see is that car sharing around the world, particularly on the continent, is growing,” commented Bharath Devanathan of Invers.
Devanathan said 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 looking at entering the London market: “Operators will fill this gap.”
The Future Landscape
The company’s competitors can be split into two camps:
- Company-Owned Fleets: Which maintain their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Peer-to-Peer Services: Which allow users to hire out their own vehicles via an app – a kind of Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.
Turo, a US-headquartered peer-to-peer platform, is assessing the UK gap. Rory Brimmer, its UK managing director, said there was a “big opportunity” 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 rush to find a way. The logistical challenge caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the future of car-sharing in the UK.
