🔗 Share this article What Has Gone Wrong at Zipcar – Is the UK Vehicle-Sharing Sector Dead? A volunteer food project in Rotherhithe has provided hundreds of prepared dishes each week for two years to pensioners and vulnerable locals in south London. Yet, the group's plans face major disruption by the announcement that they will not have use of New Year’s Day. This organization depended on Zipcar, the car-sharing company that customers to access its cars via smartphone. It caused shock across London when it said it would shut down its UK operations from 1 January. It will mean many helpers will be unable to collect food from a major food charity, which gathers excess produce from supermarkets, cafes and restaurants. Other options are less convenient, more expensive, or lack the same convenient access. “It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by the operational hurdle 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 Urban Car-Sharing The community kitchen’s drivers are among 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. The vast majority of those people were likely with Zipcar, which had a near-monopoly position in the city. The planned closure, pending consultation with staff, is a big blow to the vision that vehicle clubs in cities could cut the need for private vehicle ownership. Yet, some experts also suggested that Zipcar’s exit need not mean the demise for the idea in Britain. The Potential of Shared Mobility Car sharing is valued by city planners and green advocates as a way of mitigating the problems linked to vehicle ownership. Most cars sit idle on the side of the road for the vast majority of the time, occupying parking. They also involve large CO2 output to produce, and people without a vehicle tend to use active travel and take transit more. That helps urban areas – reducing congestion and pollution – and boosts public health through more exercise. What Went Wrong? Zipcar was founded in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK income were minimal compared with its owner's overall annual revenue, and a deficit that grew to £11.7m in 2024 gave little incentive to continue. Avis Budget has said the closure is part of a “broader transformation across our global operations, where we are taking deliberate steps to streamline operations, enhance profitability”. Zipcar’s most recent accounts said revenues had declined 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 Hurdles Yet, industry observers noted that London has specific problems that made it much harder for the sector to succeed. Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of different procedures and prices that complicate operations. Congestion Charge: The closure comes as electric cars start paying London’s congestion charge, adding extra expenses. Unequal Parking Fees: Residents in some boroughs pay as little as £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 annually, 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.” Lessons from Abroad Other European countries offer models for London to follow. Germany enacted national shared mobility laws in 2017, providing a unified system for parking, subsidies 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 trails at 0.7. “What we see is that car sharing around the world, particularly on the continent, is expanding,” said Bharath Devanathan of Invers. He suggested authorities should start to treat car sharing as a form of mass transit, and integrate 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.” What Comes Next? The company’s competitors can roughly be divided into two camps: Fleet Operators: Which own or lease their own cars. Examples 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 peer-to-peer platform, is assessing 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. However, it could take a while for other players to build momentum. For now, more people may feel forced to buy cars, and many across London will be without a convenient option. For Rotherhithe community kitchen, the next month will be a rush to find a way. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on vital services and the future of car-sharing in the UK.