What Exactly Has Gone Awry at Zipcar – Is the UK Vehicle-Sharing Market Finished?
A community kitchen in Rotherhithe has been delivering a large number of prepared dishes each week for two years to elderly residents and vulnerable locals in southeast London. However, their operations face major disruption by the announcement that they will lose cars and vans on New Year’s Day.
The group had relied on Zipcar, the car-sharing company that allowed its fleet of vehicles from the street. The company caused shock through the capital when it declared it would cease its UK operations from 1 January.
This means many helpers cannot pick up supplies from a major food charity, that collects surplus food from grocery stores, 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 project's founder. “My team and I are worried about the logistical challenge we will face. Many groups like ours will face difficulties.”
“Faced with this reality, they are all worried and thinking: ‘How will we continue?’”
A Major Blow for City Vehicle Clubs
These volunteers 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. Most of those people were likely with Zipcar, which had a near-monopoly position in the city.
The planned closure, subject to consultation with staff, is a serious setback to the vision that car sharing in urban areas could cut the need for private vehicle ownership. However, some analysts also suggested that Zipcar’s departure need not spell the end for the concept in Britain.
The Potential of Car Sharing
Shared vehicle use is valued by many urbanists and environmentalists as a way of reducing the ills linked to vehicle ownership. Most cars sit as two-tonne dead weights on the street for 95% of the time, occupying parking. They also require large CO2 output to produce, and people without a vehicle tend to use active travel and take transit more. That benefits cities – easing congestion and pollution – and boosts people’s health through more exercise.
What Went Wrong?
The company started in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company'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 “broader transformation across our global operations, where we are taking deliberate steps to simplify processes, improve returns”.
Zipcar’s most recent accounts said revenues had declined as drivers took fewer and shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said.
London's Unique Hurdles
Yet, several experts noted that London has specific problems that made it much harder for the sector to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of different procedures and costs that complicate operations.
- New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- 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 per year, creating a significant barrier.
“Our fees should be one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”
Lessons from Abroad
Other European countries offer examples 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 expanding,” said Bharath Devanathan of Invers.
He suggested authorities should start to treat car sharing as a form of mass transit, and link 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. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Peer-to-Peer Services: Which allow users to hire 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 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. “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 Rotherhithe community kitchen, the next month will be a rush to find a way. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the prospects of shared mobility in the UK.
