What Has Gone So Awry at Zipcar – Is the UK Vehicle-Sharing Market Dead?
The community kitchen in Rotherhithe has distributed hundreds of cooked meals each week for two years to elderly residents and vulnerable locals in southeast London. Yet, their operations have been thrown into disarray by the announcement that they will not have access to New Year’s Day.
The group had relied on Zipcar, the app-based vehicle rental service that customers to access its cars from the street. It caused shock through the capital when it said it would shut down its UK operations from 1 January.
It will mean many volunteers will be unable to collect food from a major food charity, which gathers excess produce from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, costlier, or lack the same flexible hours.
“The impact will be massively,” stated Vimal Pandya, the project's founder. “Personally me and my team are concerned by 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 will we continue?’”
A Significant Setback for City Vehicle Clubs
These volunteers are among more than half a million people in London who were car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those members were probably with Zipcar, which had a near-monopoly position in the city.
This shutdown, pending consultation with staff, is a big blow to hopes that car sharing in cities could cut the need for private vehicle ownership. However, some experts have noted that Zipcar’s exit need not spell the end for the idea in Britain.
The Potential of Shared Mobility
Car sharing is prized by many urbanists and green advocates as a way of reducing the ills associated with vehicle ownership. Most cars sit idle on the side of the road for 95% of the time, occupying parking. They also involve 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 public health through more exercise.
Understanding the Decline
Zipcar was founded in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company's total earnings, and a loss that grew to £11.7m in 2024 gave little incentive 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, enhance profitability”.
Zipcar’s most recent accounts said revenues had declined as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the economic squeeze, which continues to suppress demand for non-essential services,” it said.
London's Unique Challenges
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 varying processes and costs that complicate operations.
- New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Parking Permit Disparity: Locals in some boroughs pay as little as £63 for a annual electric car parking permit. A floating car club would pay over £1,100 per year, creating a significant barrier.
“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.”
Lessons from Abroad
Nations in Europe offer examples for London to follow. Germany introduced national car-sharing legislation in 2017, providing a unified system for parking, subsidies 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.
“The evidence shows is that shared mobility around the world, especially in Europe, is growing,” said Bharath Devanathan of Invers.
Devanathan said authorities should start to view vehicle clubs as a form of mass transit, and integrate it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “Operators will fill this gap.”
What Comes Next?
Other players can roughly be divided into two camps:
- Company-Owned Fleets: 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 head, 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 a while 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 the volunteers in Rotherhithe, the next month 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 future of car-sharing in the UK.
