🔗 Share this article What Has Gone So Awry at Zipcar – and the UK Car-Sharing Market Finished? A volunteer food project in Rotherhithe has been delivering a large number of prepared dishes weekly for two years to elderly residents and vulnerable locals in southeast London. Yet, their operations face major disruption by the announcement that they will lose use of New Year’s Day. The group depended on Zipcar, the app-based vehicle rental service that allowed its cars from the street. It caused shock across London when it said it would cease its UK business from 1 January. It will mean many volunteers cannot pick up supplies from a major food charity, that collects surplus food from grocery stores, cafes and restaurants. Other options are less convenient, costlier, or lack the same flexible hours. “It’s going to be affected massively,” stated Vimal Pandya, the project's founder. “My team and I are worried about the operational hurdle we will face. A lot of people like ours are going to struggle.” “Knowing the reality, everyone is concerned and thinking: ‘How will we continue?’” A Major Blow for City Vehicle Clubs The community kitchen’s drivers are among more than half a million people in London who were car club members, who could be left without easy use to vehicles, avoiding the burden and cost of ownership. Most of those people were likely with Zipcar, which had a near-monopoly position in the city. This shutdown, pending consultation with employees, is a serious setback to the vision that car sharing in cities could reduce the need for private vehicle ownership. Yet, some experts have noted that Zipcar’s departure need not mean the demise for the concept in Britain. The Potential of Shared Mobility Car sharing is valued by many urbanists and green advocates as a way of mitigating the problems associated with vehicle ownership. Most cars sit idle on the side of the road for 95% of the time, using up space. They also involve large carbon emissions to produce, and people who do not own cars tend to use active travel and take public transport more. That helps urban areas – reducing congestion and pollution – and improves people’s health through increased activity. What Went Wrong? The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's total earnings, and a loss that grew to £11.7m in 2024 gave little incentive to continue. The parent company stated the closure is part of a “broader transformation across our international business, where we are taking targeted actions to streamline operations, improve returns”. Zipcar’s most recent accounts said revenues had declined as drivers took less frequent, 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, industry observers noted that London has particular issues that made it much harder for the company and its rivals to succeed. Patchwork Policies: With numerous local councils, car-club operators face a patchwork of varying processes and prices that complicate operations. New Costs: The closure comes as 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 year’s electric car parking permit. A floating car club would pay over £1,100 annually, creating a major disincentive. “Our fees should be one-twentieth of a private parking cost,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.” A European Example Other European countries offer models 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,” said Bharath Devanathan of Invers. He suggested authorities should start to view vehicle clubs 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: “There will be fill this gap.” What Comes Next? The company’s competitors can roughly be divided into two models: Fleet Operators: Which maintain 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 – a kind of Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo. One company, a US-headquartered P2P service, is assessing 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. 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 left without access. For the volunteers in Rotherhithe, the coming weeks will be a rush to find a solution. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on community groups and the future of shared mobility in the UK.