What Has Gone Wrong at Zipcar – and the UK Car-Sharing Sector Dead?
A community kitchen in Rotherhithe has been delivering a large number of cooked meals each week for two years to pensioners and needy locals in south London. Yet, their operations face major disruption by the news that they will lose access to New Year’s Day.
This organization depended on Zipcar, the car-sharing company that allowed its fleet of vehicles via smartphone. It sent shockwaves across London when it said it would cease its UK business from 1 January.
It will mean many helpers will be unable to pick up supplies from the Felix Project, which gathers surplus food from supermarkets, cafes and restaurants. Obvious alternatives 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 worried about the logistical challenge we will face. Many groups like ours are going to struggle.”
“Knowing the reality, they are all worried and thinking: ‘How will we continue?’”
A Significant Setback for Urban Car-Sharing
The community kitchen’s drivers are among over 500,000 people in London registered as car club members, now potentially left without convenient access to vehicles, without the hassle 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 vehicle clubs in urban areas could cut the need for private vehicle ownership. Yet, some experts have noted that Zipcar’s exit need not spell the end for the idea in Britain.
The Potential of Car Sharing
Shared vehicle use is prized by many urbanists and green advocates as a way of mitigating the ills linked to vehicle ownership. Most cars sit idle on the side of the road for the vast majority of the time, occupying parking. They also involve large CO2 output to produce, and people who do not own cars tend to use active travel and take transit more. That benefits cities – reducing congestion and pollution – and boosts people’s health through increased activity.
Understanding the Decline
The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's overall annual revenue, and a loss that reached £11.7m in 2024 gave no reason 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 streamline operations, improve returns”.
Its latest financial reports said revenues had declined as drivers took fewer and shorter trips. “These changes reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for non-essential services,” it said.
The Capital's Specific Hurdles
Yet, several experts noted that London has specific problems that made it much harder for the sector to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of different procedures and costs that complicate operations.
- Congestion Charge: The closure comes as electric cars start paying London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Residents in some boroughs pay just £63 for a annual electric car parking permit. A similar shared vehicle would pay over £1,100 annually, creating a significant barrier.
“Our fees should be one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”
Lessons from Abroad
Nations in Europe 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 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 shared mobility around the world, particularly on the continent, is expanding,” commented Bharath Devanathan of Invers.
Devanathan said 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 looking at entering the London market: “Operators will fill this gap.”
The Future Landscape
The company’s competitors can roughly be divided into two models:
- 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 rent out their own vehicles via an app – similar to Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.
Turo, a US-headquartered peer-to-peer platform, 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 feel forced to buy cars, and many across London will be left without access.
For Rotherhithe community kitchen, the next month will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the prospects of shared mobility in the UK.
