What Has Gone So Wrong at Zipcar – Is the UK Vehicle-Sharing Sector Finished?
The volunteer food project in Rotherhithe has been delivering hundreds of prepared dishes each week for two years to pensioners and vulnerable locals in south London. Yet, their operations face major disruption by the news that they will not have cars and vans on New Year’s Day.
The group depended on Zipcar, the car-sharing company that allowed its cars via smartphone. It caused shock through the capital when it said it would shut down its UK business from 1 January.
This means many helpers cannot pick up supplies from a major food charity, that collects excess produce from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, more expensive, or lack the same convenient access.
“The impact will be massively,” stated Vimal Pandya, the project's founder. “My team and I are concerned by the logistical challenge we will face. A lot of people like ours are going to struggle.”
“Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?”
A Major Blow for Urban Car-Sharing
The community kitchen’s drivers 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. Most of those members were probably with Zipcar, which had a near-monopoly position in the city.
This shutdown, subject to consultation with employees, is a big blow to the vision that car sharing in cities could cut the need for private vehicle ownership. However, some experts also suggested that Zipcar’s departure need not spell the end for the idea in Britain.
The Promise of Shared Mobility
Shared vehicle use 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 carbon emissions to produce, and people without a vehicle tend to use active travel and take public transport more. That helps urban areas – reducing congestion and pollution – and improves public health through increased activity.
Understanding the Decline
Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's total earnings, and a deficit that reached £11.7m in 2024 gave little incentive to continue.
The parent company stated the closure is part of a “wider restructuring across our international business, where we are taking targeted actions to streamline operations, enhance profitability”.
Its latest financial reports said revenues had fallen 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 Challenges
However, industry observers noted that London has particular issues that made it difficult for the company and its rivals to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of different procedures and costs 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 as little as £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 annually, 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
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 5.4 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,” said Bharath Devanathan of Invers.
He suggested authorities should start to treat car sharing as a form of mass transit, and integrate it with train and bus stations. He added that a potential operator was looking at entering the London market: “There will be fill this gap.”
The Future Landscape
The company’s competitors can be split into two models:
- Fleet Operators: Which own or lease 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 – a kind of Airbnb for cars. Examples 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 “significant chance” to win more users. “A space exists 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 many across London will be left without access.
For Rotherhithe community kitchen, the coming weeks will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on vital services and the prospects of car-sharing in the UK.
