What Has Gone Awry at Zipcar – Is the UK Vehicle-Sharing Market Dead?
A community kitchen in Rotherhithe has provided hundreds of cooked meals weekly for two years to elderly residents and vulnerable locals in south London. Yet, the group's plans face major disruption by the news that they will not have use of New Year’s Day.
This organization depended on Zipcar, the car-sharing company that allowed its cars from the street. It sent shockwaves through the capital when it said it would cease its UK operations from 1 January.
It will mean many volunteers cannot pick up supplies from the Felix Project, which gathers excess produce from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, costlier, or do not offer the same convenient access.
“The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the operational hurdle we will face. A lot of people like ours are going to struggle.”
“Faced with this reality, everyone is concerned and thinking: ‘How will we continue?’”
A Major Blow for City Vehicle Clubs
These volunteers are part of more than half a million people in London who were car club members, who could be left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those members were likely with Zipcar, which had a near-monopoly position in the city.
This shutdown, pending consultation with staff, is a serious setback to the vision that car sharing in urban areas could reduce the need for private vehicle ownership. However, some analysts also suggested that Zipcar’s departure need not mean the demise for the idea in Britain.
The Promise of Car Sharing
Shared vehicle use is valued by many urbanists and environmentalists as a way of mitigating the problems associated with vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for 95% of the time, occupying parking. They also involve large CO2 output to produce, and people who do not own cars tend to walk, cycle and take transit more. That benefits cities – reducing congestion and pollution – and boosts people’s health through more exercise.
Understanding the Decline
The company started in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its owner's total earnings, and a loss that reached £11.7m in 2024 gave no reason to continue.
The parent company stated the closure is part of a “broader transformation across our international business, where we are taking targeted actions to streamline operations, enhance profitability”.
Its latest financial reports noted revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the economic squeeze, which continues to suppress demand for discretionary spending,” it said.
London's Unique Challenges
However, several experts noted that London has specific problems that made it much harder for the company and its rivals to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a mosaic 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 extra expenses.
- Parking Permit Disparity: Locals in some boroughs pay as little as £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 per year, 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
Nations in Europe offer models for London to follow. Germany introduced national car-sharing legislation in 2017, providing a nationwide framework for parking, subsidies 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.
“The evidence shows is that car sharing around the world, especially in Europe, is expanding,” said Bharath Devanathan of Invers.
He suggested authorities should start to view vehicle clubs 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: “There will be fill this gap.”
What Comes Next?
The company’s competitors can be split into two camps:
- Company-Owned Fleets: 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 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 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 some time 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 next month will be a scramble to find a way. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the prospects of shared mobility in the UK.
