What Has Gone Wrong at Zipcar – and the UK Car-Sharing Sector Dead?
A volunteer food project in Rotherhithe has provided a large number of cooked meals weekly for the past two years to pensioners and vulnerable locals in southeast London. However, the group's plans face major disruption by the announcement that they will not have use of New Year’s Day.
This organization depended on Zipcar, the car-sharing company that allowed its cars from the street. It caused shock through the capital when it declared it would cease its UK operations from 1 January.
This means many helpers cannot collect food from a major food charity, which gathers surplus food from grocery stores, cafes and restaurants. Other options are less convenient, costlier, or lack the same convenient access.
“The impact will be massively,” said Vimal Pandya, the project's founder. “My team and I are concerned by the logistical challenge we will face. Many groups like ours are going to struggle.”
“Faced with this reality, they are all worried and thinking: ‘How will we continue?’”
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 easy use to vehicles, without the hassle and cost of ownership. The vast majority of those members were probably with Zipcar, which held a dominant position in the city.
The planned closure, pending consultation with employees, is a big blow to hopes that vehicle clubs in cities could reduce the need for owning a car. Yet, some analysts have noted that Zipcar’s departure need not mean the demise for the concept in Britain.
The Potential of Shared Mobility
Car sharing is prized by many urbanists and green advocates as a way of mitigating the problems linked to vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the street for 95% of the time, occupying parking. They also involve large CO2 output to produce, and people who do not own cars tend to walk, cycle and take transit more. That helps urban areas – easing congestion and pollution – and boosts people’s health through more exercise.
Understanding the Decline
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 overall annual revenue, and a loss that grew to £11.7m in 2024 gave no reason to continue.
Avis Budget has said the closure is part of a “broader transformation across our global operations, where we are taking deliberate steps to simplify processes, enhance profitability”.
Zipcar’s most recent accounts said revenues had fallen as drivers took less frequent, shorter trips. “This trend reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for non-essential services,” it said.
The Capital's Specific Challenges
Yet, several experts noted that London has specific problems that made it difficult for the sector to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of different procedures and prices that made it harder.
- 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 just £63 for a year’s 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 private parking cost,” argued Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”
Lessons from Abroad
Nations in Europe offer models for London to follow. Germany enacted national shared mobility laws in 2017, providing a unified system 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.
“What we see is that shared mobility around the world, especially in Europe, is growing,” commented 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 a potential operator was already seriously considering entering the London market: “There will be fill this gap.”
The Future Landscape
The company’s competitors can be split into two camps:
- Fleet Operators: Which maintain their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Person-to-Person Rentals: Which allow users to rent out their own vehicles via an app – a kind of Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.
One company, a US-headquartered peer-to-peer platform, is assessing 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 many across London will be left without access.
For the volunteers in Rotherhithe, the next month will be a scramble to find a way. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the prospects of car-sharing in the UK.
