What Exactly Has Gone So Awry at Zipcar – Is the UK Vehicle-Sharing Sector Dead?
A community kitchen in Rotherhithe has been delivering a large number of cooked meals each week for the past two years to pensioners and vulnerable locals in south London. Yet, the group's plans face major disruption by the news that they will not have cars and vans on New Year’s Day.
The group had relied on Zipcar, the app-based vehicle rental service that allowed its cars via smartphone. It caused shock through the capital when it said it would cease its UK operations from 1 January.
It will mean many helpers will be unable to pick up supplies from a major food charity, that collects excess produce from grocery stores, cafes and restaurants. Obvious alternatives are further away, 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 logistical challenge we will face. Many groups like ours will face difficulties.”
“Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?”
A Significant Setback for City Vehicle Clubs
The community kitchen’s drivers are part of over 500,000 people in London who were 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 had a near-monopoly position in the city.
The planned closure, subject to consultation with staff, is a serious setback to the vision that vehicle clubs in urban areas could reduce the need for owning a car. Yet, some experts have noted that Zipcar’s departure need not mean the demise for the idea in Britain.
The Potential of Shared Mobility
Car sharing is valued by city planners 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 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 transit more. That benefits cities – reducing congestion and pollution – and boosts public health through increased activity.
What Went Wrong?
Zipcar was founded in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company's overall annual revenue, and a loss 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 simplify processes, improve returns”.
Its latest financial reports noted revenues had declined as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which continues to suppress demand for discretionary spending,” 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.
- Inconsistent Rules: Across 33 boroughs, car-club operators face a patchwork of varying processes and prices that complicate operations.
- New Costs: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Parking Permit Disparity: 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 significant barrier.
“We should literally be charged one-twentieth of a resident’s permit,” 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 models for London to follow. Germany introduced national car-sharing legislation in 2017, providing a nationwide framework for parking, support 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.
“The evidence shows is that car sharing around the world, particularly on the continent, is expanding,” 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 a potential operator was already seriously considering entering the London market: “Operators will fill this gap.”
The Future Landscape
Other players can roughly be divided into two models:
- Company-Owned Fleets: Which own or lease their own cars. This includes 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. Examples Britain’s Hiyacar and the US’s Getaround and Turo.
Turo, a US-headquartered peer-to-peer platform, 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 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 prospects of shared mobility in the UK.
