What Exactly Has Gone Wrong at Zipcar – and the UK Vehicle-Sharing Sector Finished?
The volunteer food project in Rotherhithe has provided a large number of cooked meals weekly for the past two years to elderly residents and vulnerable locals in southeast London. Yet, the group's plans have been thrown into disarray by the announcement that they will lose cars and vans on New Year’s Day.
This organization depended on Zipcar, the car-sharing company that customers to access its cars via smartphone. The company sent shockwaves across London when it declared it would cease its UK business from 1 January.
It will mean many volunteers will be unable to pick up supplies from a major food charity, which gathers surplus food from supermarkets, cafes and restaurants. Other options are less convenient, more expensive, or do not offer the same convenient access.
“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 will face difficulties.”
“Knowing the reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Major Blow for Urban Car-Sharing
The community kitchen’s drivers are part of more than half a million 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 members were likely with Zipcar, which held a dominant position in the city.
This shutdown, subject to consultation with employees, is a serious setback to hopes that vehicle clubs in urban areas could reduce the need for owning a car. However, some experts have noted 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 environmentalists as a way of mitigating the problems linked to vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for 95% of the time, occupying parking. They also involve large carbon emissions to produce, and people who do not own cars tend to use active travel and take transit more. That helps urban areas – easing congestion and pollution – and boosts people’s health through increased activity.
Understanding the Decline
The company started in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered 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 international business, where we are taking deliberate steps to simplify processes, enhance profitability”.
Zipcar’s most recent accounts noted revenues had fallen 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 Challenges
Yet, several experts noted that London has specific problems that made it much harder for the company and its rivals to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a mosaic of different procedures and prices that complicate operations.
- New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding unavoidable costs.
- Unequal Parking Fees: Locals in some boroughs pay just £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a significant barrier.
“Our fees should be 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 introduced national shared mobility laws in 2017, providing a unified system 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 lags behind 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 view vehicle clubs as a form of mass transit, and link it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “There will be fill this gap.”
What Comes Next?
Other players can be split into two camps:
- Fleet Operators: Which maintain their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Person-to-Person Rentals: 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.
One company, 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. “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. For now, 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 logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on community groups and the prospects of shared mobility in the UK.
