What Has Gone Awry at Zipcar – Is the UK Car-Sharing Market Finished?
The volunteer food project in Rotherhithe has distributed hundreds of prepared dishes each week for two years to pensioners and needy locals in southeast London. However, their operations have been thrown into disarray by the announcement that they will not have cars and vans on New Year’s Day.
The group had relied on Zipcar, the app-based vehicle rental service that customers to access its cars via smartphone. It caused shock through the capital when it said it would cease its UK business from 1 January.
It will mean many helpers will be unable to collect food from a major food charity, which gathers surplus food from supermarkets, cafes and restaurants. Other options are less convenient, more expensive, or lack the same flexible hours.
“It’s going to be affected massively,” said Vimal Pandya, the project's founder. “Personally me and my team are worried about the logistical challenge 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 Significant Setback for City Vehicle Clubs
These volunteers are among more than half a million people in London who were car club members, now potentially left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those members were probably with Zipcar, which held a dominant position in the city.
This shutdown, subject to consultation with employees, is a serious setback to the vision that vehicle clubs in urban areas could cut the need for owning a car. Yet, some analysts have noted that Zipcar’s exit need not mean the demise for the concept in Britain.
The Promise of Shared Mobility
Shared vehicle use is valued by city planners and green advocates as a way of mitigating the problems linked to vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the side of the road for 95% of the time, occupying parking. They also require large CO2 output 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 boosts public health through more exercise.
What Went Wrong?
The company started in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal 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 global operations, where we are taking deliberate steps to streamline operations, enhance profitability”.
Zipcar’s most recent accounts said revenues had fallen as drivers took fewer and shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said.
The Capital's Specific Hurdles
Yet, several experts noted that London has particular issues that made it much harder for the sector to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a mosaic of different procedures and costs that complicate operations.
- New Costs: The closure comes as electric cars becoming liable for London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Residents in some boroughs pay as little as £63 for a annual 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 resident’s permit,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.”
A European Example
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 exemptions. Now, the country has several 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 car sharing around the world, particularly on the continent, is growing,” commented Bharath Devanathan of Invers.
He suggested 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: “There will be fill this gap.”
The Future Landscape
Other players can roughly be divided into two camps:
- Fleet Operators: Which maintain their own cars. This includes 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 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 a while for other players to build momentum. In the meantime, more people may choose to buy cars, and many across London will be without a convenient option.
For Rotherhithe community kitchen, the next month will be a rush to find a way. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the future of car-sharing in the UK.
