What Exactly Has Gone So Awry at Zipcar – and the UK Vehicle-Sharing Sector Finished?
The volunteer food project in Rotherhithe has been delivering a large number of cooked meals weekly for the past two years to elderly residents and vulnerable locals in southeast London. However, the group's plans have been thrown into disarray by the news that they will not have cars and vans on New Year’s Day.
This organization had relied on Zipcar, the app-based vehicle rental service that allowed its cars via smartphone. It sent shockwaves through the capital when it declared it would cease its UK business from 1 January.
It will mean many helpers cannot 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 flexible hours.
“The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the operational hurdle we will face. Many groups like ours are going to struggle.”
“Faced with this reality, they are all worried and thinking: ‘How are we going to carry on?”
A Significant Setback for City Vehicle Clubs
These volunteers are among over 500,000 people in London who were car club members, who could be left without convenient access 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.
This shutdown, pending consultation with staff, is a big blow to the vision that car sharing in urban areas 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 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 involve large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take transit more. That helps urban areas – reducing congestion and pollution – and improves people’s health through more exercise.
What Went Wrong?
The company started in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK income were minimal compared with its parent company's total earnings, and a loss 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 international business, where we are taking targeted actions to simplify processes, enhance profitability”.
Its latest financial reports noted revenues had declined as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the economic squeeze, which continues to suppress demand for non-essential services,” it said.
The Capital's Specific Hurdles
Yet, several experts noted that London has specific problems that made it difficult for the sector to succeed.
- Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of varying processes and costs that made it harder.
- New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Locals in some boroughs pay just £63 for a annual electric car parking permit. A floating car club would pay over £1,100 annually, creating a significant barrier.
“We should literally be charged one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”
Lessons from Abroad
Nations in Europe offer models for London to follow. Germany introduced national shared mobility laws in 2017, providing a unified system 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 lags behind at 0.7.
“What we see is that car sharing around the world, especially in Europe, is growing,” said Bharath Devanathan of Invers.
Devanathan said authorities should start to view vehicle clubs as a form of mass transit, 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.”
The Future Landscape
The company’s competitors can be split into two models:
- Company-Owned Fleets: Which maintain 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 – 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. In the meantime, more people may choose to buy cars, and many across London will be left without access.
For the volunteers in Rotherhithe, the next month will be a rush to find a way. The logistical challenge caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the future of shared mobility in the UK.
