What Has Gone So Wrong at Zipcar – Is the UK Vehicle-Sharing Market Dead?
The volunteer food project in Rotherhithe has been delivering hundreds of cooked meals weekly for the past two years to pensioners and needy locals in south London. However, their operations face major disruption by the news 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 fleet of vehicles from the street. The company sent shockwaves through the capital when it declared it would cease its UK business from 1 January.
It will mean many helpers cannot collect food from the Felix Project, that collects surplus food from grocery stores, cafes and restaurants. Other options are further away, costlier, or lack the same flexible hours.
“It’s going to be affected massively,” said Vimal Pandya, the project's founder. “Personally me and my team are worried about the logistical challenge we will face. Many groups like ours are going to struggle.”
“Knowing the reality, they are all worried and thinking: ‘How will we continue?’”
A Major Blow for City Vehicle Clubs
These volunteers are part of over 500,000 people in London registered as car club members, who could be left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those people were likely with Zipcar, which held a dominant position in the city.
The planned closure, pending consultation with employees, is a serious setback to the vision that vehicle clubs in urban areas could cut the need for owning a car. Yet, some experts also suggested that Zipcar’s exit need not spell the end for the idea in Britain.
The Promise of Shared Mobility
Car sharing is prized by many urbanists and environmentalists as a way of mitigating the problems associated with vehicle ownership. Typically, vehicles sit as two-tonne dead weights 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 use active travel and take transit more. That helps urban areas – easing congestion and pollution – and boosts public health through more exercise.
What Went Wrong?
Zipcar was founded in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK income barely registered compared with its owner's overall annual revenue, and a loss that grew to £11.7m in 2024 gave no reason 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, improve returns”.
Its latest financial reports said revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the economic squeeze, which continues to suppress demand for discretionary spending,” it said.
London's Unique Hurdles
However, 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 patchwork of varying processes and costs that complicate operations.
- Congestion Charge: The closure comes as electric cars start paying London’s congestion charge, adding extra expenses.
- Parking Permit Disparity: Locals in some boroughs pay just £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 per year, creating a major disincentive.
“Our fees should be one-twentieth of a resident’s permit,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models 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 unified system for parking, support and waivers. Now, the country has 5.4 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 growing,” 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 looking at entering the London market: “There will be fill this gap.”
The Future Landscape
Other players can roughly be divided into two models:
- 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 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.
One company, a US-headquartered P2P service, 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.
Yet, it could take some time for other players to build momentum. In the meantime, more people may feel forced to buy cars, and many across London will be left without access.
For Rotherhithe community kitchen, the next month will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the future of car-sharing in the UK.
