🔗 Share this article What Exactly Has Gone Wrong at Zipcar – and the UK Car-Sharing Market Finished? The volunteer food project in Rotherhithe has distributed a large number of cooked meals each week for two years to elderly residents and needy locals in south London. However, the group's plans face major disruption by the news that they will not have use of New Year’s Day. This organization depended on Zipcar, the app-based vehicle rental service that allowed its cars via smartphone. It sent shockwaves through the capital when it declared it would shut down its UK operations from 1 January. It will mean many volunteers cannot pick up supplies from a major food charity, that collects excess produce from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, costlier, or lack the same flexible hours. “It’s going to be affected massively,” stated Vimal Pandya, the project's founder. “My team and I are worried about the logistical challenge we will face. A lot of people like ours will face difficulties.” “Knowing the reality, everyone is concerned and thinking: ‘How will we continue?’” A Major Blow for Urban Car-Sharing These volunteers are part of more than half a million people in London who were car club members, who could be left without convenient access 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 serious setback to the vision that vehicle clubs in cities could reduce the need for owning a car. However, some analysts have noted that Zipcar’s departure need not spell the end for the idea in Britain. The Promise of Car Sharing Car sharing is valued by city planners and green advocates 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 95% of the time, occupying parking. They also involve 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 improves public health through increased activity. What Went Wrong? Zipcar was founded in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its owner's total earnings, 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, enhance profitability”. Its latest financial reports noted revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the ongoing impact of the economic squeeze, which continues to suppress demand for discretionary spending,” it said. The Capital's Specific Challenges Yet, industry observers noted that London has specific problems 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 complicate operations. 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 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’re taking cars off the street. We’re putting less polluting cars in their place.” A European Example 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 waivers. Now, the country has several shared cars per 10,000 people, while France has 2.1 and Belgium has 6.3. The UK lags behind at 0.7. “What we see is that shared mobility around the world, particularly on the continent, is expanding,” commented Bharath Devanathan of Invers. He suggested authorities should start to view vehicle clubs as a form of mass transit, and integrate it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “Operators will fill this gap.” What Comes Next? Other players can roughly be divided into two camps: Company-Owned Fleets: Which maintain their own cars. Examples 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 P2P service, is already weighing up 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 a while for other players to establish themselves. For now, 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 rush to find a way. The delivery problem caused by Zipcar’s exit highlights the wider implications of its departure on community groups and the prospects of car-sharing in the UK.