What Has Gone So Awry at Zipcar – and the UK Car-Sharing Market Finished?
The volunteer food project in Rotherhithe has provided hundreds of cooked meals each week for the past two years to elderly residents and needy locals in southeast London. However, their operations face major disruption by the news that they will not have cars and vans on New Year’s Day.
The group had relied on Zipcar, the car-sharing company that customers to access its fleet of vehicles from the street. It sent shockwaves through the capital when it declared it would shut down its UK business from 1 January.
It will mean many helpers cannot collect food from a major food charity, which gathers excess produce from supermarkets, cafes and restaurants. Obvious alternatives are further away, more expensive, or lack the same flexible hours.
“The impact will be massively,” stated Vimal Pandya, the project's founder. “My team and I are worried about the logistical challenge we will face. A lot of people like ours are going to struggle.”
“Knowing the reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Significant Setback for Urban Car-Sharing
The community kitchen’s drivers are part of over 500,000 people in London who were car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. The vast majority of those members were likely with Zipcar, which held a dominant position in the city.
This shutdown, subject to consultation with employees, is a big blow to the vision that vehicle clubs in cities could reduce the need for private vehicle ownership. Yet, some experts have noted that Zipcar’s exit need not mean the demise for the idea in Britain.
The Promise of Shared Mobility
Shared vehicle use is prized by city planners and environmentalists as a way of reducing 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 involve large CO2 output to produce, and people who do not own cars tend to walk, cycle and take public transport more. That benefits cities – reducing congestion and pollution – and improves public health through increased activity.
Understanding the Decline
Zipcar was founded 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 overall annual revenue, and a deficit 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, improve returns”.
Its latest financial reports noted revenues had declined as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which continues to suppress demand for non-essential services,” it said.
London's Unique Challenges
However, industry observers noted that London has particular issues that made it difficult for the sector to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a patchwork of varying processes and costs that made it harder.
- New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Unequal Parking Fees: Residents 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 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
Other European countries 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 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 expanding,” said Bharath Devanathan of Invers.
Devanathan said authorities should start to treat car sharing as a form of mass transit, and link it with train and bus stations. He added that a potential operator was looking at entering the London market: “There will be fill this gap.”
What Comes Next?
Other players can roughly be divided into two models:
- 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 rent out their own vehicles via an app – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.
One company, a US-headquartered peer-to-peer platform, is already weighing up 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 establish themselves. For now, more people may feel forced to buy cars, and others across London will be without a convenient option.
For Rotherhithe community kitchen, the next month will be a rush to find a solution. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on vital services and the future of car-sharing in the UK.
