What Has Gone So Awry at Zipcar – Is the UK Vehicle-Sharing Sector Finished?
The volunteer food project in Rotherhithe has provided hundreds of prepared dishes each week for the past two years to pensioners and vulnerable locals in southeast London. Yet, the group's plans have been thrown into disarray by the announcement that they will not have use of New Year’s Day.
This organization had relied on Zipcar, the app-based vehicle rental service that customers to access its cars from the street. It sent shockwaves across London when it said it would shut down its UK operations from 1 January.
It will mean many volunteers cannot pick up supplies from a major food charity, which gathers excess produce from grocery stores, cafes and restaurants. Obvious alternatives are further away, more expensive, or do not offer the same flexible hours.
“The impact will be massively,” stated Vimal Pandya, the project's founder. “Personally me and my team are worried about the logistical challenge we will face. Many groups like ours will face difficulties.”
“Faced with this reality, everyone is concerned and thinking: ‘How will we continue?’”
A Significant Setback for City Vehicle Clubs
These volunteers are among over 500,000 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 likely with Zipcar, which held a dominant position in the city.
This shutdown, pending consultation with staff, is a big blow to hopes that vehicle clubs in urban areas could cut the need for owning a car. However, some analysts also suggested that Zipcar’s departure need not mean the demise for the idea in Britain.
The Potential of Car Sharing
Shared vehicle use is valued by city planners and environmentalists as a way of reducing the ills linked to vehicle ownership. Most cars sit idle on the side of the road for the vast majority 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 helps urban areas – easing congestion and pollution – and improves people’s health through increased activity.
What Went Wrong?
Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner'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 international business, where we are taking targeted actions to simplify processes, improve returns”.
Its latest financial reports noted revenues had fallen as drivers took less frequent, shorter trips. “This trend reflect the ongoing impact of the economic squeeze, which continues to suppress demand for non-essential services,” it said.
The Capital's Specific Hurdles
Yet, industry observers noted that London has particular issues that made it difficult for the sector to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of varying processes and costs that complicate operations.
- New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding extra expenses.
- Parking Permit Disparity: Locals 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 significant barrier.
“Our fees should be one-twentieth of a private parking cost,” argued Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”
A European Example
Nations in Europe offer models for London to follow. Germany enacted national shared mobility laws in 2017, providing a nationwide framework for parking, support 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 trails at 0.7.
“What we see is that shared mobility around the world, particularly on the continent, is growing,” said Bharath Devanathan of Invers.
Devanathan said authorities should start to treat car sharing as a form of public transport, and integrate it with train and bus stations. He added that one unnamed client was looking at entering the London market: “Operators will fill this gap.”
What Comes Next?
The company’s competitors can be split into two camps:
- Fleet Operators: 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 rent 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.
One company, a US-headquartered peer-to-peer platform, is already weighing up 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.
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 next month will be a rush to find a solution. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on community groups and the future of shared mobility in the UK.
