🔗 Share this article What Exactly Has Gone So Wrong at Zipcar – and the UK Vehicle-Sharing Market Finished? The community kitchen in Rotherhithe has distributed hundreds of prepared dishes each week for the past two years to elderly residents and vulnerable locals in south London. However, their operations face major disruption by the announcement that they will not have access to New Year’s Day. The group had relied on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles via smartphone. The company sent shockwaves across London when it declared it would shut down its UK operations from 1 January. It will mean many helpers cannot pick up supplies from a major food charity, which gathers surplus food from supermarkets, cafes and restaurants. Other options 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 concerned by the logistical challenge we will face. A lot of people like ours will face difficulties.” “Knowing the reality, everyone is concerned and thinking: ‘How are we going to carry on?” A Major Blow for City Vehicle Clubs These volunteers are among 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, subject to consultation with staff, is a serious setback to hopes that car sharing in urban areas could cut the need for private vehicle ownership. Yet, some analysts have noted that Zipcar’s departure need not spell the end for the idea in Britain. The Promise of Car Sharing Shared vehicle use is prized by many urbanists and green advocates as a way of mitigating the problems linked to vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for 95% of the time, using up space. They also involve large CO2 output to produce, and people who do not own cars tend to use active travel and take transit more. That helps urban areas – easing congestion and pollution – and boosts public health through more exercise. Understanding the Decline The company started in 2000 before its acquisition 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 deficit that grew to £11.7m in 2024 gave little incentive to continue. Avis Budget has said the closure is part of a “broader transformation across our global operations, where we are taking deliberate steps to streamline operations, improve returns”. Its latest financial reports said revenues had declined as drivers took fewer and shorter trips. “These changes reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said. London's Unique Challenges Yet, industry observers noted that London has particular issues that made it difficult for the company and its rivals to succeed. Patchwork Policies: With numerous local councils, car-club operators face a mosaic of varying processes and costs that made it harder. Congestion Charge: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs. Parking Permit Disparity: Residents 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 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 examples for London to follow. Germany introduced national shared mobility laws in 2017, providing a nationwide framework for parking, subsidies and waivers. Now, the country has 5.4 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 view vehicle clubs as a form of mass transit, 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 be split into two models: Company-Owned Fleets: Which maintain their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility. 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 “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 some time for other players to build momentum. In the meantime, more people may feel forced to buy cars, and others across London will be left without access. For the volunteers in Rotherhithe, the next month will be a rush to find a solution. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of car-sharing in the UK.