🔗 Share this article What Has Gone Wrong at Zipcar – and the UK Vehicle-Sharing Market Dead? A volunteer food project in Rotherhithe has provided a large number of prepared dishes each week 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 access to New Year’s Day. The group depended on Zipcar, the car-sharing company that allowed its fleet of vehicles from the street. The company sent shockwaves through the capital when it declared it would cease its UK business from 1 January. It will mean many helpers will be unable to collect food from the Felix Project, which gathers excess produce from grocery stores, cafes and restaurants. Other options are less convenient, more expensive, or lack the same flexible hours. “It’s going to be affected massively,” stated Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the operational hurdle we will face. Many groups like ours will face difficulties.” “Faced with this reality, they are all worried and thinking: ‘How will we continue?’” A Significant Setback for Urban Car-Sharing These volunteers are among more than half a million people in London registered as car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those people were probably with Zipcar, which held a dominant position in the city. This shutdown, pending consultation with employees, is a serious setback to the vision that car sharing 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 prized by city planners and environmentalists as a way of mitigating the ills associated with vehicle ownership. Typically, vehicles sit idle on the street for the vast majority of the time, using up space. They also involve large CO2 output to produce, and people without a vehicle tend to walk, cycle and take public transport more. That helps urban areas – easing congestion and pollution – and boosts public health through more exercise. Understanding the Decline Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company's overall annual revenue, and a deficit 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 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 ongoing impact of the economic squeeze, which is dampening demand for non-essential services,” it said. The Capital's Specific Challenges However, several experts noted that London has particular issues that made it much harder for the company and its rivals to succeed. Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of different procedures and costs that complicate operations. Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses. Unequal Parking Fees: 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,” 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 examples for London to follow. Germany introduced national shared mobility laws in 2017, providing a unified system 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 trails 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 mass transit, and integrate it with train and bus stations. He added that a potential operator was looking at entering the London market: “Operators will fill this gap.” The Future Landscape Other players 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. Peer-to-Peer Services: 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 P2P service, is already weighing up 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. For now, 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 solution. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the future of shared mobility in the UK.