What Exactly Has Gone So Wrong at Zipcar – Is the UK Car-Sharing Market Finished?
The community kitchen in Rotherhithe has provided hundreds of cooked meals weekly for two years to elderly residents and vulnerable locals in southeast London. Yet, the group's plans face major disruption by the announcement that they will not have access to New Year’s Day.
This organization depended on Zipcar, the car-sharing company that customers to access its fleet of vehicles from the street. It caused shock through the capital when it said it would cease its UK operations from 1 January.
This means many volunteers will be unable to pick up supplies from the Felix Project, that collects surplus food from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, costlier, or do not offer the same convenient access.
“The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the logistical challenge we will face. A lot of people like ours will face difficulties.”
“Faced with this reality, they are all worried and thinking: ‘How are we going to carry on?”
A Major Blow for Urban Car-Sharing
These volunteers are among over 500,000 people in London registered as car club members, now potentially left without easy use to vehicles, without the hassle and cost of ownership. Most of those members were probably with Zipcar, which held a dominant position in the city.
The planned closure, subject to consultation with employees, is a serious setback to hopes that vehicle clubs in cities could reduce the need for private vehicle ownership. Yet, some analysts also suggested that Zipcar’s exit need not mean the demise for the concept in Britain.
The Potential of Shared Mobility
Shared vehicle use is valued by city planners and environmentalists as a way of mitigating the problems associated with vehicle ownership. Typically, vehicles sit idle on the street for the vast majority of the time, using up space. They also require large CO2 output to produce, and people without a vehicle tend to walk, cycle and take public transport more. That helps urban areas – reducing congestion and pollution – and improves people’s health through increased activity.
What Went Wrong?
Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's total earnings, and a deficit that reached £11.7m in 2024 gave little incentive to continue.
The parent company stated the closure is part of a “wider restructuring across our global operations, where we are taking targeted actions to simplify processes, enhance profitability”.
Its latest financial reports noted revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for discretionary spending,” it said.
London's Unique Hurdles
Yet, industry observers noted that London has specific problems that made it difficult for the company and its rivals to succeed.
- Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of different procedures and prices that made it harder.
- Congestion Charge: The closure comes as electric cars start paying London’s congestion charge, adding unavoidable costs.
- Parking Permit Disparity: Residents in some boroughs pay as little as £63 for a annual electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a major disincentive.
“Our fees should be one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models in their place.”
A European Example
Nations in Europe offer examples 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 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.
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
The company’s competitors can roughly be divided into two camps:
- Company-Owned Fleets: Which maintain their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Person-to-Person Rentals: Which allow users to hire out their own vehicles via an app – similar to 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 “big opportunity” to win more users. “A space exists that is going to need to be filled, because London still needs to move,” Brimmer said.
Yet, it could take a while for other players to build momentum. For now, more people may choose to buy cars, and many across London will be left without access.
For the volunteers in Rotherhithe, the coming weeks will be a rush to find a way. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the prospects of shared mobility in the UK.
