What Exactly Has Gone So Wrong at Zipcar – Is the UK Vehicle-Sharing Sector Dead?

The community kitchen in Rotherhithe has provided a large number of cooked meals each week for two years to elderly residents and vulnerable locals in south London. Yet, the group's plans have been thrown into disarray by the news that they will lose use of New Year’s Day.

The group depended on Zipcar, the car-sharing company that customers to access its fleet of vehicles from the street. It sent shockwaves across London when it said it would shut down its UK operations from 1 January.

It will mean many helpers cannot collect food from the Felix Project, that collects surplus food from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, costlier, or lack the same flexible hours.

“The impact will be massively,” stated 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 are going to struggle.”

“Faced with this reality, they are all worried and thinking: ‘How are we going to carry on?”

A Significant Setback for City Vehicle Clubs

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 people 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 car sharing in cities could cut the need for owning a car. Yet, some analysts have noted that Zipcar’s exit need not spell the end for the idea in Britain.

The Potential of Shared Mobility

Shared vehicle use is prized by many urbanists and environmentalists as a way of reducing the problems associated with vehicle ownership. Typically, vehicles sit idle on the street for 95% of the time, using up space. They also involve 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 boosts people’s health through increased activity.

What Went Wrong?

Zipcar was founded in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its owner's overall annual revenue, and a loss that reached £11.7m in 2024 gave no reason to continue.

Avis Budget has said the closure is part of a “wider restructuring across our global operations, where we are taking deliberate steps to streamline operations, enhance profitability”.

Zipcar’s most recent accounts said revenues had fallen as drivers took less frequent, shorter trips. “This trend reflect the ongoing impact of the economic squeeze, which is dampening demand for non-essential services,” it said.

The Capital's Specific Hurdles

However, several experts noted that London has specific problems that made it much harder for the sector to succeed.

• Patchwork Policies: With numerous local councils, car-club operators face a patchwork of different procedures and costs that made it harder.
• Congestion Charge: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
• Unequal Parking Fees: 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 significant barrier.

“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 car-sharing legislation in 2017, providing a unified system for parking, support 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 trails at 0.7.

“What we see is that shared mobility around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers.

He suggested authorities should start to view vehicle clubs as a form of public transport, and integrate it with train and bus stations. He added that one unnamed client was looking at entering the London market: “There will be fill this gap.”

What Comes Next?

Other players can be split into two camps:

1. Fleet Operators: Which maintain their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. Person-to-Person Rentals: Which allow users to hire out their own vehicles via an app – a kind of Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.

Turo, a US-headquartered peer-to-peer platform, is assessing the UK gap. Rory Brimmer, its UK managing director, 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.

Yet, it could take a while for other players to build momentum. 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 coming weeks will be a scramble to find a way. The delivery problem caused by Zipcar’s exit underscores the wider implications of its departure on community groups and the future of shared mobility in the UK.