What Exactly Has Gone So Awry at Zipcar – Is the UK Car-Sharing Sector Dead?
The community kitchen in Rotherhithe has been delivering hundreds of cooked meals each week for two years to elderly residents and vulnerable locals in southeast London. However, the group's plans have been thrown into disarray by the announcement that they will lose cars and vans on New Year’s Day.
This organization depended on Zipcar, the app-based vehicle rental service that customers to access its cars via smartphone. It sent shockwaves through the capital when it declared it would cease its UK operations from 1 January.
This means many helpers cannot pick up supplies from the Felix Project, that collects 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,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are worried about the operational hurdle we will face. A lot of people like ours are going to struggle.”
“Faced with this reality, they are all worried and thinking: ‘How will we continue?’”
A Major Blow for City Vehicle Clubs
The community kitchen’s drivers are part of more than half a million 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 members were likely with Zipcar, which held a dominant position in the city.
This shutdown, pending consultation with employees, is a big blow to hopes that car sharing in urban areas could cut the need for owning a car. However, some analysts also suggested that Zipcar’s exit need not spell the end for the concept in Britain.
The Promise of Car Sharing
Car sharing is valued by city planners and green advocates as a way of reducing the ills linked to vehicle ownership. Most cars sit idle on the street for the vast majority 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 benefits cities – easing congestion and pollution – and boosts people’s health through more exercise.
What Went Wrong?
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 total earnings, and a loss that grew to £11.7m in 2024 gave no reason to continue.
Avis Budget has said the closure is part of a “wider restructuring across our international business, where we are taking deliberate steps to simplify processes, improve returns”.
Zipcar’s most recent accounts noted revenues had declined as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the economic squeeze, which is dampening demand for discretionary spending,” it said.
The Capital's Specific Hurdles
However, several experts 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 varying processes and prices that complicate operations.
- Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Parking Permit Disparity: Residents in some boroughs pay just £63 for a annual electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a major disincentive.
“Our fees should be one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars 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.
“What we see is that car sharing around the world, particularly on the continent, is expanding,” commented Bharath Devanathan of Invers.
He suggested authorities should start to treat car sharing as a form of public transport, 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.”
The Future Landscape
Other players can roughly be divided into two camps:
- 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 – similar to Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.
One company, a US-headquartered P2P service, is already weighing up the UK gap. Rory Brimmer, its UK head, said there was a “big opportunity” 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 Rotherhithe community kitchen, the next month 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.
