What Exactly Has Gone Awry at Zipcar – Is the UK Vehicle-Sharing Sector Finished?
A volunteer food project in Rotherhithe has distributed hundreds of prepared dishes weekly for two years to pensioners and vulnerable locals in south London. Yet, the group's plans have been thrown into disarray by the news that they will lose use of New Year’s Day.
This organization depended on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles from the street. The company caused shock through the capital when it said it would cease its UK operations from 1 January.
It will mean many helpers cannot pick up supplies from a major food charity, that collects excess produce from grocery stores, cafes and restaurants. Obvious alternatives are further away, more expensive, or do not offer the same convenient access.
“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 will we continue?’”
A Major Blow for Urban Car-Sharing
These volunteers are part of more than half a million people in London who were car club members, who could be left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those members were probably with Zipcar, which held a dominant position in the city.
This shutdown, pending consultation with employees, is a serious setback to hopes that car sharing in cities could reduce the need for owning a car. However, some analysts also suggested that Zipcar’s departure need not spell the end for the idea in Britain.
The Potential of Shared Mobility
Shared vehicle use is valued by many urbanists and green advocates as a way of mitigating the problems associated with vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the street for the vast majority of the time, occupying parking. They also involve large carbon emissions to produce, and people without a vehicle tend to use active travel and take public transport more. That benefits cities – easing congestion and pollution – and improves public health through more exercise.
What Went Wrong?
Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's overall annual revenue, and a loss that reached £11.7m in 2024 gave little incentive 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 declined as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which is dampening demand for non-essential services,” it said.
London's Unique Challenges
Yet, several experts noted that London has particular issues that made it much harder for the company and its rivals to succeed.
- Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of different procedures and costs that made it harder.
- New Costs: The closure comes as electric cars start paying London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Residents 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 annually, creating a significant barrier.
“We should literally be charged one-twentieth of a resident’s permit,” 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 shared mobility laws in 2017, providing a unified system for parking, subsidies 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 car sharing around the world, especially in Europe, is expanding,” commented Bharath Devanathan of Invers.
He suggested authorities should start to treat car sharing 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: “There will be fill this gap.”
What Comes Next?
The company’s competitors can roughly be divided into two camps:
- Fleet Operators: Which maintain their own cars. This includes 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 – a kind of Airbnb for cars. Examples 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 “significant chance” 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 establish themselves. For now, more people may choose to buy cars, and others across London will be without a convenient option.
For the volunteers in Rotherhithe, the next month will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of car-sharing in the UK.
