What Has Gone So Awry at Zipcar – Is the UK Vehicle-Sharing Market Finished?

The volunteer food project in Rotherhithe has provided a large number of cooked meals each week for the past two years to elderly residents and needy locals in south London. Yet, the group's plans have been thrown into disarray by the news that they will not have access to New Year’s Day.

The group had relied on Zipcar, the car-sharing company that customers to access its cars via smartphone. The company caused shock through the capital when it said it would cease its UK business from 1 January.

This means many volunteers cannot pick up supplies from the Felix Project, that collects 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,” said Vimal Pandya, the project'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 will we continue?’”

A Major Blow for Urban Car-Sharing

The community kitchen’s drivers are among over 500,000 people in London registered as car club members, now potentially left without easy use to vehicles, without the hassle and cost of ownership. Most of those people were likely with Zipcar, which had a near-monopoly position in the city.

The planned closure, pending consultation with employees, is a big blow to hopes that car sharing in urban areas could reduce the need for owning a car. Yet, some experts have noted that Zipcar’s departure need not mean the demise for the idea in Britain.

The Promise of Shared Mobility

Shared vehicle use is valued by city planners and environmentalists as a way of mitigating the ills linked to vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the side of the road for the vast majority of the time, occupying parking. They also require large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take public transport more. That helps urban areas – easing congestion and pollution – and boosts public health through more exercise.

What Went Wrong?

Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues 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 international business, where we are taking deliberate steps to simplify processes, improve returns”.

Zipcar’s most recent accounts said revenues had fallen as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the economic squeeze, which is dampening demand for non-essential services,” it said.

The Capital's Specific Hurdles

However, several experts noted that London has particular issues that made it much harder for the company and its rivals to succeed.

• Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of varying processes and prices that complicate operations.
• Congestion Charge: The closure coincides with electric cars start paying 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 per year, creating a major disincentive.

“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 introduced national shared mobility laws in 2017, providing a nationwide framework for parking, support 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 lags behind at 0.7.

“The evidence shows is that shared mobility around the world, especially in Europe, is expanding,” commented 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 looking at entering the London market: “Operators will fill this gap.”

The Future Landscape

The company’s competitors can be split into two models:

1. Company-Owned Fleets: Which own or lease their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. 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.

Turo, a US-headquartered P2P service, is assessing 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.

However, 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 without a convenient option.

For the volunteers in Rotherhithe, the coming weeks will be a scramble 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.