What Has Gone Awry at Zipcar – and the UK Vehicle-Sharing Market Dead?
The volunteer food project in Rotherhithe has distributed hundreds of prepared dishes each week for the past two years to elderly residents and needy locals in southeast London. Yet, their operations face major disruption by the news 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 via smartphone. The company sent shockwaves across London when it declared it would cease its UK business from 1 January.
It will mean many helpers cannot pick up supplies from the Felix Project, that collects surplus food from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, more expensive, 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 concerned by the logistical challenge we will face. Many groups like ours will face difficulties.”
“Faced with this 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 more than half a million people in London who were car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. Most of those members were likely with Zipcar, which held a dominant position in the city.
This shutdown, subject to consultation with staff, is a serious setback to the vision that car sharing in urban areas could reduce the need for private vehicle ownership. However, some experts also suggested that Zipcar’s exit need not spell the end for the concept in Britain.
The Potential of Shared Mobility
Car sharing is prized by many urbanists and environmentalists as a way of mitigating the ills associated with vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the side of the road for the vast majority of the time, occupying parking. They also require large carbon emissions to produce, and people who do not own cars tend to use active travel and take transit more. That helps urban areas – reducing congestion and pollution – and improves people’s health through increased activity.
Understanding the Decline
Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK income 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 “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 less frequent, shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said.
London's Unique Challenges
Yet, industry observers noted that London has particular issues that made it difficult for the company and its rivals to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a patchwork of varying processes and costs that made it harder.
- Congestion Charge: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Parking Permit Disparity: Residents in some boroughs pay just £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,” argued Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”
Lessons from Abroad
Other European countries offer models for London to follow. Germany enacted national car-sharing legislation 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.
“The evidence shows is that shared mobility around the world, especially in Europe, is expanding,” commented Bharath Devanathan of Invers.
He suggested authorities should start to view vehicle clubs as a form of public transport, and link it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “There will be fill this gap.”
What Comes Next?
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 rent out their own vehicles via an app – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.
One company, a US-headquartered P2P service, is already weighing up the UK gap. Rory Brimmer, its UK head, said there was a “significant chance” to win more users. “A space exists 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 without a convenient option.
For Rotherhithe community kitchen, the next month will be a scramble to find a solution. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of shared mobility in the UK.
