What Has Gone Wrong at Zipcar – Is the UK Vehicle-Sharing Sector Dead?
The community kitchen in Rotherhithe has been delivering hundreds of prepared dishes weekly for the past two years to elderly residents and vulnerable locals in southeast London. However, their operations have been thrown into disarray by the news that they will lose use of New Year’s Day.
This organization had relied on Zipcar, the car-sharing company that customers to access its fleet of vehicles from the street. The company sent shockwaves across London when it said it would cease its UK operations from 1 January.
This means many helpers will be unable to pick up supplies from the Felix Project, which gathers surplus food from supermarkets, cafes and restaurants. Other options are less convenient, more expensive, or lack the same convenient access.
“The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by 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 Major Blow for City Vehicle Clubs
These volunteers are among over 500,000 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 people were likely 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 car sharing in urban areas could cut the need for owning a car. Yet, some analysts also suggested that Zipcar’s exit need not spell the end for the concept in Britain.
The Promise of Car Sharing
Car sharing is valued by city planners and environmentalists as a way of reducing the problems linked to vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the side of the road for 95% of the time, using up space. They also require large CO2 output to produce, and people without a vehicle tend to use active travel and take public transport more. That benefits cities – reducing congestion and pollution – and boosts people’s health through increased activity.
What Went Wrong?
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 owner's overall annual revenue, 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 “broader transformation across our global operations, where we are taking deliberate steps to simplify processes, improve returns”.
Zipcar’s most recent accounts noted revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which continues to suppress demand for discretionary spending,” it said.
The Capital's Specific Hurdles
However, industry observers noted that London has particular issues that made it difficult for the sector to succeed.
- Inconsistent Rules: Across 33 boroughs, car-club operators face a patchwork of different procedures and prices that made it harder.
- Congestion Charge: The closure comes as electric cars start paying London’s congestion charge, adding unavoidable costs.
- Parking Permit Disparity: Locals in some boroughs pay just £63 for a annual electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a major disincentive.
“Our fees should be one-twentieth of a private parking cost,” argued Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”
A European Example
Nations in Europe offer examples for London to follow. Germany enacted 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 trails at 0.7.
“What we see is that shared mobility around the world, especially in Europe, is expanding,” 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.”
The Future Landscape
Other players can be split into two models:
- 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 assessing the UK gap. Rory Brimmer, its UK managing director, said there was a “big opportunity” 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 some time for other players to build momentum. For now, more people may feel forced to buy cars, and many across London will be left without access.
For Rotherhithe community kitchen, the coming weeks will be a scramble to find a way. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the prospects of shared mobility in the UK.
