What Has Gone So Wrong at Zipcar – and the UK Car-Sharing Sector Finished?
The volunteer food project in Rotherhithe has been delivering a large number of cooked meals each week for two years to elderly residents and needy locals in southeast London. Yet, their operations face major disruption by the announcement that they will lose cars and vans on New Year’s Day.
This organization had relied on Zipcar, the car-sharing company that allowed its fleet of vehicles from the street. The company caused shock through the capital when it said it would shut down its UK operations from 1 January.
This means many volunteers cannot pick up supplies from the Felix Project, that collects surplus food from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, more expensive, or do not offer the same convenient access.
“It’s going to be affected massively,” stated 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 are going to struggle.”
“Faced with this reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Major Blow for Urban Car-Sharing
These volunteers are among over 500,000 people in London registered as car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. Most of those members were likely with Zipcar, which had a near-monopoly position in the city.
This shutdown, subject to consultation with employees, is a serious setback to hopes that car sharing in urban areas could cut the need for owning a car. However, 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 environmentalists as a way of reducing the ills associated with 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 involve 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 people’s 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 barely registered compared with its parent company's overall annual revenue, and a loss that reached £11.7m in 2024 gave no reason 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 declined as drivers took fewer and shorter trips. “This trend reflect the ongoing impact of the cost-of-living crisis, which continues to suppress demand for discretionary spending,” it said.
The Capital's Specific Hurdles
Yet, several experts noted that London has specific problems that made it difficult for the company and its rivals to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of varying processes and prices that complicate operations.
- Congestion Charge: The closure coincides with electric cars becoming liable for 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 major disincentive.
“Our fees should be 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, support 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 lags behind at 0.7.
“The evidence shows is that shared mobility around the world, especially in Europe, 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 one unnamed client was already seriously considering entering the London market: “There will be fill this gap.”
What Comes Next?
The company’s competitors can be split into two models:
- Company-Owned Fleets: 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 hire 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 already weighing up the UK gap. Rory Brimmer, its UK managing director, 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 build momentum. In the meantime, more people may feel forced to buy cars, and many across London will be without a convenient option.
For the volunteers in Rotherhithe, 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.
