What Has Gone Awry at Zipcar – Is the UK Vehicle-Sharing Market Dead?
A volunteer food project in Rotherhithe has distributed a large number of prepared dishes each week for the past two years to elderly residents and needy locals in southeast London. Yet, their operations face major disruption by the announcement that they will not have access to New Year’s Day.
The group depended on Zipcar, the car-sharing company that customers to access its cars from the street. The company sent shockwaves across London when it declared it would shut down its UK business from 1 January.
This means many volunteers cannot collect food from a major food charity, which gathers excess produce from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, costlier, or lack the same flexible hours.
“The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by the logistical challenge we will face. A lot of people like ours are going to struggle.”
“Faced with this reality, they are all worried and thinking: ‘How will we continue?’”
A Major Blow for Urban Car-Sharing
These volunteers are among more than half a million people in London registered as car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those members were likely with Zipcar, which held a dominant position in the city.
This shutdown, subject to consultation with employees, is a big blow to hopes that vehicle clubs in cities could reduce the need for owning a car. Yet, some experts have noted that Zipcar’s departure need not spell the end for the concept in Britain.
The Promise of Car Sharing
Car sharing is prized by many urbanists and environmentalists as a way of reducing the problems linked to vehicle ownership. Typically, vehicles sit idle 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 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 increased activity.
Understanding the Decline
Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company's overall annual revenue, and a deficit that grew to £11.7m in 2024 gave little incentive to continue.
The parent company stated the closure is part of a “wider restructuring across our international business, where we are taking targeted actions to streamline operations, enhance profitability”.
Its latest financial reports said revenues had declined as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for non-essential services,” it said.
The Capital's Specific Challenges
Yet, industry observers noted that London has particular issues that made it much harder for the company and its rivals to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a patchwork of different procedures and prices that complicate operations.
- Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Residents in some boroughs pay just £63 for a year’s electric car parking permit. A floating car club 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’re putting less polluting cars in their place.”
Lessons from Abroad
Nations in Europe offer models for London to follow. Germany enacted national shared mobility laws in 2017, providing a nationwide framework for parking, support 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 car sharing around the world, particularly on the continent, is growing,” said Bharath Devanathan of Invers.
Devanathan said authorities should start to treat car sharing as a form of public transport, 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:
- 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 – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.
Turo, a US-headquartered peer-to-peer platform, 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.
Yet, it could take a while for other players to build momentum. In the meantime, more people may choose to buy cars, and others across London will be left without access.
For the volunteers in Rotherhithe, the next month will be a rush to find a way. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the future of car-sharing in the UK.
