What Has Gone So Awry at Zipcar – Is the UK Vehicle-Sharing Market Dead?
A volunteer food project in Rotherhithe has distributed hundreds of cooked meals weekly for the past two years to elderly residents and vulnerable locals in south London. Yet, their operations face major disruption by the news that they will not have access to New Year’s Day.
This organization depended on Zipcar, the app-based vehicle rental service that allowed its cars from the street. It sent shockwaves through the capital when it said it would cease its UK business from 1 January.
It will mean many volunteers will be unable to collect food from a major food charity, which gathers surplus food from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, 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 worried about 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 Major Blow for City Vehicle Clubs
The community kitchen’s drivers are part of over 500,000 people in London who were car club members, now potentially 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 employees, is a serious setback to the vision that car sharing in cities could reduce the need for owning a car. Yet, some analysts also suggested that Zipcar’s departure need not mean the demise for the idea in Britain.
The Promise of Car Sharing
Car sharing is prized by city planners and green advocates as a way of reducing the problems associated with vehicle ownership. Most cars sit as two-tonne dead weights on the street for the vast majority of the time, occupying parking. They also require large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take public transport more. That helps urban areas – easing congestion and pollution – and improves people’s health through increased activity.
What Went Wrong?
Zipcar was founded in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its parent company's overall annual revenue, and a deficit that reached £11.7m in 2024 gave no reason to continue.
Avis Budget has said the closure is part of a “wider restructuring across our global operations, where we are taking deliberate steps to streamline operations, improve returns”.
Its latest financial reports said revenues had declined as drivers took fewer and shorter trips. “This trend reflect the ongoing impact of the economic squeeze, which continues to suppress demand for discretionary spending,” it said.
London's Unique Hurdles
However, several experts noted that London has specific problems that made it difficult for the sector to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a mosaic of varying processes and prices that complicate operations.
- Congestion Charge: The closure coincides with electric cars becoming liable for London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Residents in some boroughs pay just £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a major disincentive.
“We should literally be charged 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.”
A European Example
Nations in Europe offer examples for London to follow. Germany introduced national shared mobility laws in 2017, providing a nationwide framework for parking, support 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 trails at 0.7.
“What we see is that shared mobility around the world, especially in Europe, is expanding,” commented Bharath Devanathan of Invers.
Devanathan said authorities should start to treat car sharing as a form of public transport, and link it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “There will be fill this gap.”
What Comes Next?
The company’s competitors can be split into two camps:
- Fleet Operators: Which maintain their own cars. Examples 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. Players include Britain’s Hiyacar and the US’s Getaround and Turo.
One company, a US-headquartered peer-to-peer platform, is already weighing up 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.
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 community groups and the prospects of shared mobility in the UK.
