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

The volunteer food project in Rotherhithe has provided a large number of prepared dishes each week for two years to elderly residents and vulnerable locals in southeast London. However, the group's plans have been thrown into disarray by the announcement that they will lose cars and vans on New Year’s Day.

The group depended on Zipcar, the car-sharing company that customers to access its fleet of vehicles via smartphone. It sent shockwaves across London when it declared it would shut down its UK business from 1 January.

This means many volunteers cannot pick up supplies from a major food charity, that collects surplus food from supermarkets, cafes and restaurants. Other options are less convenient, 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, they are all worried and thinking: ‘How will we continue?’”

A Significant Setback for City Vehicle Clubs

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 easy use to vehicles, avoiding the burden and cost of ownership. Most of those members were likely with Zipcar, which held a dominant position in the city.

The planned closure, subject to consultation with employees, is a big blow to the vision that car sharing in cities could reduce the need for owning a car. However, some experts also suggested that Zipcar’s exit need not mean the demise for the concept in Britain.

The Promise of Shared Mobility

Shared vehicle use is valued by many urbanists and green advocates 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 without a vehicle tend to walk, cycle and take transit more. That benefits cities – reducing congestion and pollution – and improves people’s health through increased activity.

Understanding the Decline

The company started in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's total earnings, and a deficit that grew to £11.7m in 2024 gave no reason to continue.

The parent company stated the closure is part of a “wider restructuring across our global operations, where we are taking deliberate steps to simplify processes, improve returns”.

Zipcar’s most recent accounts noted revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the ongoing impact of the economic squeeze, which continues to suppress demand for discretionary spending,” it said.

London's Unique Hurdles

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

• Patchwork Policies: With numerous local councils, car-club operators face a patchwork of different procedures and costs that complicate operations.
• New Costs: The closure comes as electric cars start paying London’s congestion charge, adding unavoidable costs.
• Parking Permit Disparity: 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 annually, 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 introduce cleaner models in their place.”

Lessons from Abroad

Other European countries offer models for London to follow. Germany introduced national shared mobility laws in 2017, providing a unified system 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 lags behind at 0.7.

“What we see is that shared mobility around the world, particularly on the continent, 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: “Operators will fill this gap.”

The Future Landscape

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

1. Company-Owned Fleets: Which maintain their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. Person-to-Person Rentals: 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 assessing the UK gap. Rory Brimmer, its UK managing director, said there was a “significant chance” 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. For now, more people may choose 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 way. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of shared mobility in the UK.