What Has Gone So Awry at Zipcar – and the UK Vehicle-Sharing Market Finished?
A volunteer food project in Rotherhithe has distributed hundreds of prepared dishes each week for the past two years to elderly residents and vulnerable locals in south London. However, the group's plans have been thrown into disarray by the news that they will lose access to New Year’s Day.
The group depended on Zipcar, the app-based vehicle rental service that customers to access its cars from the street. The company caused shock across London when it declared it would cease its UK operations from 1 January.
It will mean many volunteers will be unable to collect food from a major food charity, that collects excess produce from supermarkets, cafes and restaurants. Obvious alternatives are further away, costlier, or do not offer the same flexible hours.
“It’s going to be affected massively,” said Vimal Pandya, the project's founder. “My team and I are worried about the operational hurdle we will face. A lot of people like ours will face difficulties.”
“Faced with this reality, they are all worried and thinking: ‘How will we continue?’”
A Significant Setback for Urban Car-Sharing
The community kitchen’s drivers are part of over 500,000 people in London who were car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those members were probably with Zipcar, which had a near-monopoly position in the city.
The planned closure, subject to consultation with staff, is a serious setback to hopes that car sharing in cities could reduce the need for private vehicle ownership. However, some analysts have noted that Zipcar’s exit need not spell the end for the idea in Britain.
The Promise of Car Sharing
Car sharing is prized by many urbanists and environmentalists as a way of mitigating the problems linked to vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for 95% of the time, using up space. They also involve large carbon emissions to produce, and people who do not own cars tend to use active travel and take public transport more. That benefits cities – reducing congestion and pollution – and boosts public health through more exercise.
Understanding the Decline
The company started 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 total earnings, and a loss that grew to £11.7m in 2024 gave little incentive to continue.
The parent company stated the closure is part of a “broader transformation across our global operations, where we are taking targeted actions to simplify processes, improve returns”.
Its latest financial reports noted revenues had fallen as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said.
London's Unique Challenges
Yet, several experts noted that London has specific problems that made it much harder for the sector to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of different procedures and costs that complicate operations.
- New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
- Parking Permit Disparity: Locals in some boroughs pay just £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’re taking cars off the street. We’re putting less polluting cars 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 nationwide framework for parking, subsidies and waivers. Now, the country has several 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 shared mobility 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 public transport, and integrate 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.”
The Future Landscape
Other players can be split into two models:
- Fleet Operators: 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 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.
One company, a US-headquartered peer-to-peer platform, 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 some time for other players to build momentum. 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 coming weeks 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 prospects of car-sharing in the UK.
