What Exactly Has Gone Awry at Zipcar – and the UK Vehicle-Sharing Sector Dead?
A community kitchen in Rotherhithe has distributed a large number of cooked meals weekly for the past two years to elderly residents and needy locals in south London. However, the group's plans face major disruption by the announcement that they will lose access to New Year’s Day.
This organization depended on Zipcar, the car-sharing company that allowed its fleet of vehicles via smartphone. The company sent shockwaves through the capital when it declared it would cease its UK operations from 1 January.
This means many helpers will be unable to collect food from the Felix Project, which gathers excess produce from supermarkets, cafes and restaurants. Obvious alternatives are further away, more expensive, or lack the same flexible hours.
“It’s going to be affected massively,” stated Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by 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 Significant Setback for Urban Car-Sharing
These volunteers are among over 500,000 people in London who were car club members, now potentially left without convenient access to vehicles, without the hassle and cost of ownership. Most of those people were likely with Zipcar, which held a dominant position in the city.
The planned closure, subject to consultation with staff, is a serious setback to the vision that vehicle clubs in cities could cut the need for owning a car. Yet, some experts have noted that Zipcar’s departure need not mean the demise for the idea in Britain.
The Potential of Shared Mobility
Shared vehicle use is valued by many urbanists and green advocates as a way of reducing the problems associated with vehicle ownership. Most cars 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 – reducing congestion and pollution – and boosts people’s health through more exercise.
Understanding the Decline
Zipcar was founded in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its owner's total earnings, and a loss that grew to £11.7m in 2024 gave little incentive to continue.
The parent company stated the closure is part of a “wider restructuring across our international business, 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. “This trend reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said.
The Capital's Specific Hurdles
However, several experts noted that London has particular issues that made it much harder for the sector to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of varying processes and costs that made it harder.
- New Costs: The closure comes as electric cars start paying London’s congestion charge, adding extra expenses.
- Parking Permit Disparity: Residents in some boroughs pay as little as £63 for a year’s electric car parking permit. A similar shared vehicle 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 remove vehicles. We’re putting less polluting cars in their place.”
A European Example
Nations in Europe offer models 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.
“The evidence shows is that shared mobility 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 one unnamed client was looking at entering the London market: “There will be fill this gap.”
What Comes Next?
The company’s competitors can roughly be divided into two camps:
- Fleet Operators: Which own or lease 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 – a kind of Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.
One company, a US-headquartered P2P service, is assessing the UK gap. Rory Brimmer, its UK head, said there was a “big opportunity” 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 build momentum. For now, more people may choose to buy cars, and many across London will be left without access.
For the volunteers in Rotherhithe, the coming weeks will be a scramble to find a solution. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the prospects of shared mobility in the UK.