What Has Gone So Awry at Zipcar – and the UK Vehicle-Sharing Sector Dead?

A community kitchen in Rotherhithe has provided hundreds of cooked meals weekly for two years to elderly residents and vulnerable locals in south London. However, the group's plans have been thrown into disarray by the announcement that they will not have access to New Year’s Day.

This organization had relied on Zipcar, the car-sharing company that customers to access its cars from the street. It sent shockwaves through the capital when it said it would cease its UK business from 1 January.

This means many helpers will be unable to collect food from a major food charity, that collects excess produce from supermarkets, cafes and restaurants. Other options are less convenient, more expensive, or lack the same convenient access.

“The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the operational hurdle we will face. Many groups 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

The community kitchen’s drivers are part of more than half a million people in London registered as car club members, who could be left without convenient access to vehicles, avoiding the burden and cost of ownership. The vast majority of those members were probably with Zipcar, which held a dominant position in the city.

This shutdown, subject to consultation with staff, is a big blow to hopes that car sharing in cities could cut the need for owning a car. However, some experts also suggested that Zipcar’s departure need not mean the demise for the idea in Britain.

The Promise of Car Sharing

Car sharing is valued by city planners and green advocates as a way of mitigating the ills associated with vehicle ownership. Typically, vehicles 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 walk, cycle and take public transport more. That benefits cities – easing congestion and pollution – and improves public health through more exercise.

What Went Wrong?

The company started in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company's total earnings, 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 “broader transformation across our global operations, where we are taking deliberate steps to simplify processes, improve returns”.

Zipcar’s most recent accounts said revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said.

London's Unique Hurdles

Yet, several experts 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 patchwork of different procedures and costs that complicate operations.
• New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding extra expenses.
• Unequal Parking Fees: Locals in some boroughs pay just £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 annually, creating a major disincentive.

“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

Nations in Europe offer models for London to follow. Germany enacted national car-sharing legislation in 2017, providing a unified system 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 lags behind at 0.7.

“What we see is that car sharing around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers.

He suggested authorities should start to view vehicle clubs as a form of mass transit, 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 camps:

1. Company-Owned Fleets: Which own or lease their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. 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.

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 establish themselves. 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 coming weeks will be a rush to find a solution. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the future of car-sharing in the UK.