What Has Gone Awry at Zipcar – and the UK Car-Sharing Sector Dead?
A volunteer food project in Rotherhithe has been delivering hundreds of prepared dishes weekly for two years to pensioners and vulnerable locals in south London. However, their operations 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 cars from the street. The company sent shockwaves across London when it declared it would shut down its UK business from 1 January.
This means many helpers will be unable to pick up supplies from the Felix Project, which gathers excess produce from grocery stores, cafes and restaurants. Obvious alternatives are further away, more expensive, or do not offer the same convenient access.
“The impact will be massively,” stated 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 convenient access to vehicles, avoiding the burden and cost of ownership. The vast majority of those members were probably with Zipcar, which held a dominant position in the city.
This shutdown, pending consultation with employees, is a big blow to hopes that vehicle clubs in urban areas could cut the need for owning a car. Yet, some analysts also suggested that Zipcar’s departure need not spell the end for the concept in Britain.
The Potential of Car Sharing
Car sharing is valued by city planners and green advocates as a way of mitigating the ills 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 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 boosts public health through increased activity.
Understanding the Decline
Zipcar was founded in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's total earnings, and a loss that reached £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”.
Zipcar’s most recent accounts 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 non-essential services,” it said.
London's Unique Challenges
However, several experts noted that London has particular issues that made it much harder for the company and its rivals to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a mosaic of varying processes and prices that made it harder.
- Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
- 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 annually, creating a significant barrier.
“We should literally be charged one-twentieth of a resident’s permit,” said Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”
A European Example
Nations in Europe offer models for London to follow. Germany introduced national car-sharing legislation in 2017, providing a nationwide framework 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 lags behind at 0.7.
“The evidence shows is that car sharing 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 mass transit, and link 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?
The company’s competitors can roughly be divided into two models:
- Fleet Operators: Which own or lease their own cars. Examples 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 – a kind of Airbnb for cars. Examples 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.
Yet, it could take some time for other players to build momentum. For now, more people may choose to buy cars, and others across London will be left without access.
For Rotherhithe community kitchen, the coming weeks will be a rush to find a way. The delivery problem caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the future of car-sharing in the UK.
