What Exactly Has Gone So Awry at Zipcar – and the UK Car-Sharing Market Finished?
The community kitchen in Rotherhithe has been delivering a large number of prepared dishes each week for the past two years to elderly residents and needy locals in southeast London. However, their operations face major disruption by the news 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 caused shock across London when it said it would shut down its UK business from 1 January.
It will mean many volunteers cannot collect food from the Felix Project, which gathers surplus food from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, more expensive, or do not offer the same flexible hours.
“The impact will be massively,” stated Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the logistical challenge we will face. Many groups like ours are going to struggle.”
“Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?”
A Major Blow for Urban Car-Sharing
The community kitchen’s drivers are part of 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. The vast majority of those members were probably with Zipcar, which had a near-monopoly position in the city.
The planned closure, pending consultation with staff, is a serious setback to hopes that vehicle clubs in urban areas could cut the need for owning a car. However, some experts also suggested that Zipcar’s exit need not spell the end for the concept in Britain.
The Promise of Car Sharing
Shared vehicle use is prized by city planners and green advocates as a way of mitigating the ills linked to vehicle ownership. Most cars sit idle on the street for 95% of the time, occupying parking. They also require large carbon emissions to produce, and people without a vehicle tend to use active travel and take transit more. That helps urban areas – easing congestion and pollution – and improves public health through increased activity.
What Went Wrong?
The company started in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its owner's total earnings, and a loss that grew to £11.7m in 2024 gave no reason to continue.
The parent company stated the closure is part of a “wider restructuring across our global operations, where we are taking targeted actions to streamline operations, 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 economic squeeze, which continues to suppress demand for non-essential services,” it said.
The Capital's Specific Hurdles
Yet, several experts noted that London has particular issues that made it difficult for the sector to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of different procedures and prices that made it harder.
- 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 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.”
Lessons from Abroad
Nations in Europe offer examples for London to follow. Germany enacted 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 lags behind at 0.7.
“The evidence shows is that shared mobility around the world, particularly on the continent, is growing,” commented Bharath Devanathan of Invers.
Devanathan said authorities should start to view vehicle clubs as a form of public transport, and link it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “Operators will 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 – similar to Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.
Turo, a US-headquartered P2P service, is already weighing up the UK gap. Rory Brimmer, its UK head, 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.
However, it could take a while for other players to establish themselves. In the meantime, more people may choose to buy cars, and many 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 wider implications of its departure on vital services and the prospects of car-sharing in the UK.
