What Has Gone Awry at Zipcar – and the UK Vehicle-Sharing Market Dead?
The volunteer food project in Rotherhithe has distributed hundreds of prepared dishes weekly for the past two years to elderly residents and needy locals in southeast London. However, their operations face major disruption by the announcement that they will lose access to New Year’s Day.
This organization had relied on Zipcar, the car-sharing company that customers to access its cars via smartphone. The company caused shock across London when it declared it would shut down its UK business from 1 January.
It will mean many helpers cannot pick up supplies from a major food charity, which gathers surplus food from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, more expensive, or do not offer the same convenient access.
“It’s going to be affected 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 are going to struggle.”
“Knowing the reality, everyone is concerned and thinking: ‘How will we continue?’”
A Major Blow for Urban Car-Sharing
The community kitchen’s drivers are among over 500,000 people in London registered as car club members, who could be left without convenient access to vehicles, without the hassle 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 employees, is a serious setback to the vision that car sharing in cities could reduce the need for owning a car. However, some analysts have noted that Zipcar’s exit need not spell the end for the idea in Britain.
The Promise of Shared Mobility
Shared vehicle use is prized by city planners and environmentalists as a way of reducing the problems associated with vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the side of the road for the vast majority of the time, using up space. 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 public health through more exercise.
What Went Wrong?
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 owner's overall annual revenue, and a deficit that grew to £11.7m in 2024 gave no reason to continue.
Avis Budget has said the closure is part of a “broader transformation across our global operations, where we are taking deliberate steps to simplify processes, improve returns”.
Zipcar’s most recent accounts 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 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 sector to succeed.
- Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of varying processes and costs that made it harder.
- Congestion Charge: 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 similar shared vehicle would pay over £1,100 per year, creating a major disincentive.
“Our fees should be one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”
Lessons from Abroad
Nations in Europe offer models for London to follow. Germany enacted national car-sharing legislation 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 shared mobility around the world, particularly on the continent, is expanding,” commented Bharath Devanathan of Invers.
He suggested authorities should start to view vehicle clubs as a form of mass transit, and link it with train and bus stations. He added that a potential operator was looking at entering the London market: “There will be fill this gap.”
What Comes Next?
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 hire out their own vehicles via an app – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.
One company, a US-headquartered P2P service, is assessing 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. In the meantime, more people may choose 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 way. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the future of shared mobility in the UK.
