What Has Gone So Wrong at Zipcar – and the UK Car-Sharing Market Finished?
The volunteer food project in Rotherhithe has been delivering a large number of prepared dishes each week for two years to pensioners and needy locals in south 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 car-sharing company that allowed its fleet of vehicles via smartphone. It sent shockwaves across London when it said it would shut down its UK business from 1 January.
It will mean many helpers will be unable to pick up supplies from the Felix Project, which gathers surplus food from grocery stores, cafes and restaurants. Other options are further away, more expensive, or lack the same flexible hours.
“The impact will be massively,” stated Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the operational hurdle we will face. Many groups like ours will face difficulties.”
“Knowing the reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Significant Setback for Urban Car-Sharing
These volunteers are among over 500,000 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, pending consultation with staff, is a serious setback to hopes that vehicle clubs in urban areas could cut the need for owning a car. Yet, some experts also suggested that Zipcar’s departure need not mean the demise for the concept in Britain.
The Potential of Shared Mobility
Shared vehicle use is prized by many urbanists and green advocates as a way of reducing the problems linked to vehicle ownership. Most cars sit as two-tonne dead weights on the street for 95% of the time, using up space. 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 – easing congestion and pollution – and boosts public health through more exercise.
What Went Wrong?
The company started in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its parent company's total earnings, and a deficit that reached £11.7m in 2024 gave little incentive to continue.
Avis Budget has said the closure is part of a “wider restructuring across our international business, where we are taking targeted actions to streamline operations, improve returns”.
Its latest financial reports noted revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the economic squeeze, which is dampening demand for discretionary spending,” it said.
The Capital's Specific Hurdles
Yet, several experts noted that London has specific problems that made it much harder for the company and its rivals to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of different procedures and prices that complicate operations.
- New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Residents in some boroughs pay just £63 for a annual 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,” 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 models for London to follow. Germany introduced national shared mobility laws in 2017, providing a nationwide framework 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 trails at 0.7.
“What we see is that shared mobility around the world, particularly on the continent, is expanding,” said Bharath Devanathan of Invers.
Devanathan said authorities should start to view vehicle clubs as a form of public transport, 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 models:
- Fleet Operators: Which maintain 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 – a kind of Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.
Turo, a US-headquartered peer-to-peer platform, is already weighing up the UK gap. Rory Brimmer, its UK managing director, 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 some time for other players to establish themselves. For now, more people may choose to buy cars, and others across London will be left without access.
For Rotherhithe community kitchen, the next month will be a scramble to find a way. The delivery problem caused by Zipcar’s exit underscores the wider implications of its departure on community groups and the prospects of shared mobility in the UK.
