What Exactly Has Gone So Awry at Zipcar – Is the UK Vehicle-Sharing Market Finished?

The volunteer food project in Rotherhithe has provided a large number of cooked meals weekly for the past two years to pensioners and vulnerable locals in south London. However, the group's plans have been thrown into disarray by the news that they will lose access to New Year’s Day.

This organization had relied on Zipcar, the car-sharing company that customers to access its fleet of vehicles via smartphone. It sent shockwaves through the capital when it said it would shut down its UK operations from 1 January.

This means many helpers will be unable to collect food from a major food charity, that collects surplus food from grocery stores, cafes and restaurants. Obvious alternatives are further away, costlier, or lack the same convenient access.

“The impact will be massively,” stated Vimal Pandya, the community kitchen’s founder. “Personally me and my team are worried about the operational hurdle we will face. Many groups like ours will face difficulties.”

“Faced with this reality, they are all worried and thinking: ‘How are we going to carry on?”

A Significant Setback 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, avoiding the burden and cost of ownership. Most of those people were probably with Zipcar, which had a near-monopoly position in the city.

The planned closure, pending consultation with employees, is a serious setback to the vision that car sharing in cities could reduce the need for private vehicle ownership. However, some analysts have noted that Zipcar’s exit need not spell the end for the concept in Britain.

The Potential of Shared Mobility

Car sharing is prized by many urbanists and green advocates as a way of reducing the ills linked to vehicle ownership. Most cars sit as two-tonne dead weights on the street for the vast majority of the time, using up space. They also involve large CO2 output to produce, and people without a vehicle tend to use active travel and take transit more. That benefits cities – reducing congestion and pollution – and boosts public health through increased activity.

What Went Wrong?

Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its parent company's total earnings, and a loss that reached £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 targeted actions to simplify processes, improve returns”.

Zipcar’s most recent accounts said revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the economic squeeze, which is dampening demand for discretionary spending,” it said.

The Capital's Specific Challenges

Yet, several experts noted that London has specific problems that made it much harder for the sector to succeed.

• Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of varying processes and prices that made it harder.
• Congestion Charge: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
• Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a annual electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a major disincentive.

“Our fees should be one-twentieth of a resident’s permit,” said Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”

Lessons from Abroad

Other European countries offer models for London to follow. Germany enacted national car-sharing legislation in 2017, providing a nationwide framework 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, particularly on the continent, is growing,” said Bharath Devanathan of Invers.

Devanathan said 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 looking at entering the London market: “Operators will fill this gap.”

What Comes Next?

The company’s competitors can be split into two camps:

1. Company-Owned Fleets: Which maintain their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. 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 P2P service, is already weighing up the UK gap. Rory Brimmer, its UK managing director, said there was a “significant chance” 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 some time for other players to build momentum. In the meantime, more people may choose to buy cars, and others across London will be left without access.

For the volunteers in Rotherhithe, the coming weeks will be a rush to find a solution. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of shared mobility in the UK.