What Has Gone So Awry at Zipcar – Is the UK Vehicle-Sharing Market Finished?
The community kitchen in Rotherhithe has been delivering hundreds of prepared dishes each week for two years to elderly residents and vulnerable locals in south London. Yet, their operations face major disruption by the news that they will lose cars and vans on 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. It sent shockwaves through the capital when it declared it would shut down its UK operations from 1 January.
It will mean many helpers will be unable to pick up supplies from a major food charity, that collects surplus food from grocery stores, cafes and restaurants. Other options are less convenient, more expensive, or lack the same flexible hours.
“The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the operational hurdle we will face. A lot of people like ours are going to struggle.”
“Knowing the reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Significant Setback for Urban Car-Sharing
These volunteers are part of more than half a million people in London who were car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. Most of those people were probably with Zipcar, which held a dominant position in the city.
This shutdown, subject to consultation with staff, is a serious setback to hopes that vehicle clubs in cities could reduce the need for owning a car. Yet, some experts have noted that Zipcar’s departure need not spell the end for the concept in Britain.
The Promise of Car Sharing
Car sharing is prized by many urbanists and green advocates as a way of mitigating the problems linked to vehicle ownership. Typically, vehicles sit idle on the street for 95% of the time, using up space. They also involve large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take public transport more. That benefits cities – easing congestion and pollution – and improves public health through more exercise.
Understanding the Decline
The company started in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company's overall annual revenue, and a deficit that reached £11.7m in 2024 gave no reason to continue.
The parent company stated the closure is part of a “wider restructuring across our global operations, where we are taking targeted actions to streamline operations, enhance profitability”.
Zipcar’s most recent accounts noted revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the economic squeeze, which is dampening demand for discretionary spending,” it said.
The Capital's Specific Challenges
However, several experts noted that London has specific problems that made it difficult for the company and its rivals to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a patchwork of different procedures and prices that made it harder.
- New Costs: The closure comes as 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 annually, creating a significant barrier.
“Our fees should be one-twentieth of a private parking cost,” argued Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”
A European Example
Other European countries offer examples for London to follow. Germany enacted national shared mobility laws in 2017, providing a nationwide framework for parking, subsidies and waivers. Now, the country has 5.4 shared cars per 10,000 people, while France has 2.1 and Belgium has 6.3. The UK lags behind at 0.7.
“The evidence shows is that shared mobility around the world, especially in Europe, is expanding,” commented 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 a potential operator was already seriously considering entering the London market: “Operators will fill this gap.”
What Comes Next?
Other players can be split into two models:
- Fleet Operators: Which maintain 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. 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 some time for other players to establish themselves. For now, more people may choose to buy cars, and many across London will be without a convenient option.
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 future of car-sharing in the UK.
