What Exactly Has Gone Wrong at Zipcar – and the UK Vehicle-Sharing Market Finished?
A volunteer food project in Rotherhithe has provided hundreds of prepared dishes weekly for two years to pensioners and vulnerable locals in southeast London. Yet, 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 had relied on Zipcar, the car-sharing company that allowed its fleet of vehicles via smartphone. It caused shock across London when it declared it would shut down its UK operations from 1 January.
It will mean many volunteers cannot pick up supplies from the Felix Project, which gathers excess produce from grocery stores, cafes and restaurants. Other options are less convenient, more expensive, or do not offer the same convenient access.
“The impact will be massively,” said Vimal Pandya, the project's founder. “My team and I are worried about the operational hurdle we will face. Many groups like ours are going to struggle.”
“Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?”
A Significant Setback for Urban Car-Sharing
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 easy use to vehicles, without the hassle and cost of ownership. Most of those people were likely with Zipcar, which had a near-monopoly position in the city.
The planned closure, subject to consultation with employees, is a big blow to the vision that vehicle clubs in cities could cut the need for owning a car. Yet, some experts also suggested that Zipcar’s exit need not mean the demise for the idea in Britain.
The Promise of Shared Mobility
Shared vehicle use is prized by city planners and environmentalists as a way of mitigating the ills associated with vehicle ownership. Most cars sit idle on the street for the vast majority of the time, occupying parking. They also require large CO2 output 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 boosts people’s health through more exercise.
Understanding the Decline
The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company's overall annual revenue, and a loss that reached £11.7m in 2024 gave little incentive to continue.
Avis Budget has said the closure is part of a “wider restructuring across our global operations, where we are taking deliberate steps to simplify processes, enhance profitability”.
Its latest financial reports said revenues had declined as drivers took fewer and shorter trips. “This trend reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said.
The Capital's Specific Hurdles
However, 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 mosaic of different procedures and prices that made it harder.
- New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Unequal Parking Fees: 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 per year, creating a significant barrier.
“Our fees should be one-twentieth of a private parking cost,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.”
A European Example
Other European countries offer examples for London to follow. Germany enacted national shared mobility laws in 2017, providing a nationwide framework for parking, subsidies and exemptions. Now, the country has 5.4 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, especially in Europe, is growing,” commented Bharath Devanathan of Invers.
Devanathan said authorities should start to view vehicle clubs 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
The company’s competitors 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. 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 head, said there was a “significant chance” 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. In the meantime, more people may choose to buy cars, and others across London will be left without access.
For the volunteers in Rotherhithe, the next month will be a scramble to find a solution. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the future of shared mobility in the UK.
