What Exactly Has Gone Awry at Zipcar – Is the UK Vehicle-Sharing Sector Dead?
A community kitchen in Rotherhithe has been delivering hundreds of cooked meals each week for the past two years to pensioners and vulnerable locals in southeast London. Yet, their operations face major disruption by the announcement that they will not have cars and vans on New Year’s Day.
This organization depended on Zipcar, the car-sharing company that allowed its fleet of vehicles from the street. It sent shockwaves across London when it declared it would cease its UK business from 1 January.
This means many volunteers will be unable to collect food from the Felix Project, which gathers surplus food from grocery stores, cafes and restaurants. Other options are further away, costlier, or lack the same flexible hours.
“It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the operational hurdle we will face. A lot of people like ours will face difficulties.”
“Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?”
A Significant Setback for City Vehicle Clubs
These volunteers are among over 500,000 people in London who were car club members, now potentially left without easy use to vehicles, avoiding the burden and cost of ownership. Most of those people were probably with Zipcar, which had a near-monopoly position in the city.
This shutdown, subject to consultation with staff, is a big blow to hopes that vehicle clubs in cities could cut the need for private vehicle ownership. Yet, some analysts have noted that Zipcar’s departure need not mean the demise for the idea in Britain.
The Potential of Car Sharing
Shared vehicle use is prized by city planners and green advocates as a way of reducing the ills linked to vehicle ownership. Typically, vehicles sit idle on the street for 95% of the time, using up space. They also involve large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take public transport more. That benefits cities – easing congestion and pollution – and boosts 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 income barely registered compared with its parent company's total earnings, and a loss that grew to £11.7m in 2024 gave little incentive to continue.
Avis Budget has said the closure is part of a “wider restructuring across our international business, where we are taking deliberate steps to simplify processes, improve returns”.
Its latest financial reports noted revenues had declined as drivers took fewer and 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 Hurdles
Yet, several experts noted that London has specific problems that made it difficult for the company and its rivals to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a patchwork of different procedures and costs that complicate operations.
- New Costs: The closure coincides with 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 year’s 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 resident’s permit,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models in their place.”
A European Example
Other European countries offer models for London to follow. Germany enacted national car-sharing legislation 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 expanding,” said Bharath Devanathan of Invers.
He suggested authorities should start to view vehicle clubs as a form of mass transit, 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 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 hire 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 head, 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.
Yet, it could take a while for other players to establish themselves. For now, more people may feel forced to buy cars, and many across London will be left without access.
For Rotherhithe community kitchen, the next month will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the future of car-sharing in the UK.
