What Exactly Has Gone Awry at Zipcar – Is the UK Vehicle-Sharing Sector Finished?
A community kitchen in Rotherhithe has distributed a large number of cooked meals weekly for the past two years to elderly residents and vulnerable locals in southeast London. Yet, the group's plans have been thrown into disarray by the announcement that they will not have cars and vans on New Year’s Day.
The group depended on Zipcar, the car-sharing company that allowed its fleet of vehicles via smartphone. It caused shock through the capital when it declared it would cease its UK business from 1 January.
It will mean many helpers will be unable to pick up supplies from a major food charity, that collects surplus food from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, costlier, or lack the same convenient access.
“The impact will be massively,” stated Vimal Pandya, the project's founder. “Personally me and my team are worried about 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 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. The vast majority of those people 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 vehicle clubs in urban areas could cut the need for owning a car. Yet, some experts have noted that Zipcar’s departure need not spell the end for the concept in Britain.
The Promise of Shared Mobility
Car sharing is valued by many urbanists and environmentalists 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, occupying parking. They also involve large carbon emissions to produce, and people without a vehicle tend to use active travel and take transit more. That helps urban areas – reducing congestion and pollution – and boosts people’s 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 barely registered compared with its owner's total earnings, and a loss that grew to £11.7m in 2024 gave no reason to continue.
The parent company stated the closure is part of a “wider restructuring across our international business, where we are taking deliberate steps to streamline operations, improve returns”.
Its latest financial reports noted revenues had declined as drivers took fewer and shorter trips. “These changes reflect the continuing effect of the economic squeeze, which continues to suppress demand for non-essential services,” it said.
The Capital's Specific Challenges
Yet, industry observers noted that London has particular issues that made it difficult for the sector to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a mosaic of varying processes and prices that made it harder.
- New Costs: The closure comes as electric cars start paying 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 similar shared vehicle would pay over £1,100 per year, creating a major disincentive.
“We should literally be charged one-twentieth of a private parking cost,” 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 models for London to follow. Germany enacted national shared mobility laws in 2017, providing a unified system for parking, subsidies and waivers. 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.
“What we see 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 mass transit, and link it with train and bus stations. He added that one unnamed client was looking at entering the London market: “There will be fill this gap.”
The Future Landscape
The company’s competitors can roughly be divided into two models:
- Company-Owned Fleets: 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 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 P2P service, is assessing 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.
Yet, it could take some time for other players to build momentum. For now, more people may feel forced to buy cars, and others across London will be without a convenient option.
For Rotherhithe community kitchen, the coming weeks will be a rush to find a way. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the future of car-sharing in the UK.
