What Exactly Has Gone So Wrong at Zipcar – Is the UK Vehicle-Sharing Sector Dead?

The volunteer food project in Rotherhithe has provided hundreds of prepared dishes weekly for the past two years to elderly residents and vulnerable locals in south London. Yet, their operations have been thrown into disarray by the news that they will not have cars and vans on New Year’s Day.

The group had relied on Zipcar, the car-sharing company that allowed its cars via smartphone. It caused shock through the capital when it declared it would shut down its UK operations from 1 January.

This means many volunteers will be unable to collect food from a major food charity, that collects excess produce from grocery stores, cafes and restaurants. Other options are further away, costlier, or lack the same flexible hours.

“The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the logistical challenge we will face. A lot of people like ours will face difficulties.”

“Faced with this reality, everyone is concerned and thinking: ‘How will we continue?’”

A Significant Setback for Urban Car-Sharing

The community kitchen’s drivers are part of over 500,000 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 likely with Zipcar, which held a dominant position in the city.

The planned closure, pending consultation with staff, is a serious setback to the vision that car sharing in cities could cut the need for owning a car. Yet, some experts also suggested that Zipcar’s exit need not mean the demise for the concept in Britain.

The Promise of Car Sharing

Car sharing is prized by city planners and green advocates as a way of mitigating the ills associated with vehicle ownership. Typically, vehicles sit idle on the side of the road for the vast majority of the time, occupying parking. They also require large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take transit more. That benefits cities – easing congestion and pollution – and boosts 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 barely registered compared with its owner's overall annual revenue, and a loss that reached £11.7m in 2024 gave little incentive to continue.

Avis Budget has said the closure is part of a “broader transformation across our international business, where we are taking targeted actions to simplify processes, improve returns”.

Zipcar’s most recent accounts said revenues had declined as drivers took fewer and shorter trips. “These changes reflect the ongoing impact of the cost-of-living crisis, 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 difficult for the sector to succeed.

• Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of different procedures and costs that made it harder.
• Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
• Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a annual electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a significant barrier.

“We should literally be charged one-twentieth of a private parking cost,” argued Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”

Lessons from Abroad

Other European countries offer models for London to follow. Germany enacted national shared mobility laws in 2017, providing a unified system for parking, support 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.

“What we see is that shared mobility around the world, particularly on the continent, is growing,” commented Bharath Devanathan of Invers.

Devanathan said authorities should start to treat car sharing as a form of public transport, and link it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “Operators will fill this gap.”

The Future Landscape

Other players can be split into two camps:

1. Company-Owned Fleets: Which maintain their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. Peer-to-Peer Services: 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 P2P service, is assessing 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 a while for other players to establish themselves. In the meantime, more people may choose to buy cars, and others across London will be without a convenient option.

For the volunteers in Rotherhithe, the coming weeks will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit highlights the wider implications of its departure on community groups and the future of shared mobility in the UK.