What Has Gone Awry at Zipcar – Is the UK Vehicle-Sharing Market Finished?
The volunteer food project in Rotherhithe has been delivering hundreds of cooked meals weekly for two years to pensioners and vulnerable locals in south London. However, the group's plans have been thrown into disarray by the news that they will not have use of New Year’s Day.
The group depended on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles from the street. It caused shock through the capital when it said it would cease its UK business from 1 January.
It will mean many helpers will be unable to pick up supplies from the Felix Project, that collects excess produce from supermarkets, cafes and restaurants. Other options are further away, costlier, or do not offer the same flexible hours.
“It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are worried about the operational hurdle we will face. A lot of people like ours will face difficulties.”
“Faced with this reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Significant Setback for City Vehicle Clubs
These volunteers are among more than half a million people in London registered as car club members, now potentially left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those people were probably with Zipcar, which held a dominant position in the city.
The planned closure, pending consultation with staff, is a serious setback to the vision that car sharing in cities could reduce the need for private vehicle ownership. However, some analysts have noted that Zipcar’s exit need not mean the demise for the concept in Britain.
The Promise of Shared Mobility
Car sharing is prized by city planners and environmentalists as a way of mitigating the ills linked to vehicle ownership. Typically, vehicles sit idle on the street for 95% of the time, occupying parking. They also require large carbon emissions to produce, and people without a vehicle tend to use active travel and take public transport 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 were minimal compared with its owner'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 noted revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the economic squeeze, which is dampening demand for discretionary spending,” it said.
London's Unique Hurdles
Yet, several experts noted that London has specific problems 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 costs that made it harder.
- Congestion Charge: The closure comes as electric cars start paying London’s congestion charge, adding extra expenses.
- Parking Permit Disparity: Residents 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 per year, creating a significant barrier.
“We should literally be charged one-twentieth of a resident’s permit,” said 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 enacted national shared mobility laws 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.
“The evidence shows is that car sharing around the world, especially in Europe, is expanding,” said 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: “Operators will fill this gap.”
The Future Landscape
Other players can be split into two camps:
- Company-Owned Fleets: Which own or lease their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Peer-to-Peer Services: Which allow users to hire out their own vehicles via an app – a kind of Airbnb for cars. Players include 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 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 some time for other players to establish themselves. For now, more people may feel forced to buy cars, and many 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 underscores the wider implications of its departure on community groups and the prospects of car-sharing in the UK.
