What Exactly Has Gone So Awry at Zipcar – Is the UK Car-Sharing Market Finished?
A community kitchen in Rotherhithe has provided a large number of cooked meals weekly for the past two years to elderly residents and vulnerable locals in south London. Yet, the group's plans 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 customers to access its fleet of vehicles via smartphone. The company caused shock across London when it declared it would cease 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 excess produce from grocery stores, cafes and restaurants. Other options are less convenient, costlier, or do not offer the same flexible hours.
“It’s going to be affected 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 will we continue?’”
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 members were likely with Zipcar, which had a near-monopoly position in the city.
This shutdown, pending consultation with staff, is a big blow to the vision that car sharing in urban areas could cut the need for private vehicle ownership. Yet, some experts also suggested that Zipcar’s exit need not spell the end for the idea in Britain.
The Potential of Car Sharing
Car sharing is valued by many urbanists and green advocates as a way of reducing the problems associated with vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for the vast majority of the time, occupying parking. They also require 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 public health through increased activity.
Understanding the Decline
Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its owner's total earnings, and a deficit that grew to £11.7m in 2024 gave little incentive to continue.
Avis Budget has said the closure is part of a “broader transformation across our global operations, where we are taking targeted actions to simplify processes, improve returns”.
Its latest financial reports noted revenues had fallen as drivers took fewer and shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which continues to suppress demand for non-essential services,” it said.
The Capital's Specific Hurdles
However, industry observers noted that London has particular issues that made it much harder for the company and its rivals to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of different procedures and prices that made it harder.
- New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding extra expenses.
- Parking Permit Disparity: 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 major disincentive.
“Our fees should be one-twentieth of a private parking cost,” said 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 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 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 public transport, and integrate it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “Operators will fill this gap.”
What Comes Next?
Other players can roughly be divided into two camps:
- Fleet Operators: Which maintain their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Peer-to-Peer Services: Which allow users to rent out their own vehicles via an app – a kind of 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 head, 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 a while for other players to build momentum. For now, more people may feel forced to buy cars, and others across London will be without a convenient option.
For Rotherhithe community kitchen, the next month will be a rush 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 car-sharing in the UK.
