What Exactly Has Gone So Wrong at Zipcar – and the UK Vehicle-Sharing Market Finished?
A community kitchen in Rotherhithe has provided hundreds of prepared dishes each week for two years to pensioners and vulnerable locals in south London. Yet, their operations face major disruption by the news that they will not have use of New Year’s Day.
The group had relied on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles from the street. It caused shock through the capital when it said it would shut down its UK business from 1 January.
This means many volunteers will be unable to pick up supplies 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 project's founder. “Personally me and my team are concerned by the operational hurdle we will face. A lot of people like ours will face difficulties.”
“Faced with this reality, they are all worried and thinking: ‘How will we continue?’”
A Significant Setback for Urban Car-Sharing
The community kitchen’s drivers are part of more than half a million people in London registered as car club members, who could be left without convenient access to vehicles, without the hassle and cost of ownership. The vast majority of those people were probably 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 reduce the need for private vehicle ownership. However, some analysts have noted that Zipcar’s departure need not spell the end for the concept in Britain.
The Potential of Shared Mobility
Shared vehicle use is valued by many urbanists and environmentalists as a way of mitigating the problems associated with vehicle ownership. Most cars sit idle on the side of the road 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 – reducing congestion and pollution – and boosts public health through increased activity.
What Went Wrong?
The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income were minimal compared with its owner'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 streamline operations, enhance profitability”.
Its latest financial reports said revenues had fallen as drivers took fewer and shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said.
The Capital's Specific Challenges
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 mosaic of different procedures and costs that complicate operations.
- New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Locals 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.
“Our fees should be one-twentieth of a resident’s permit,” 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
Nations in Europe offer examples for London to follow. Germany introduced national car-sharing legislation in 2017, providing a nationwide framework for parking, subsidies and exemptions. Now, the country has several 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 treat car sharing 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: “There will be fill this gap.”
What Comes Next?
The company’s competitors can be split into two camps:
- 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 hire 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 “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. In the meantime, 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 scramble to find a solution. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the prospects of shared mobility in the UK.
