🔗 Share this article What Exactly Has Gone Awry at Zipcar – Is the UK Vehicle-Sharing Sector Dead? The community kitchen in Rotherhithe has been delivering a large number of cooked meals each week for two years to pensioners and needy locals in southeast London. Yet, the group's plans face major disruption by the news that they will not have cars and vans on New Year’s Day. This organization depended on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles from the street. The company sent shockwaves through the capital when it declared it would shut down its UK operations from 1 January. It will mean many volunteers will be unable to pick up supplies from the Felix Project, that collects excess produce from supermarkets, cafes and restaurants. Obvious alternatives are further away, more expensive, or do not offer the same convenient access. “It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are worried about the operational hurdle we will face. Many groups like ours will face difficulties.” “Faced with this reality, everyone is concerned and thinking: ‘How will we continue?’” A Significant Setback for Urban Car-Sharing These volunteers are among more than half a million people in London who were car club members, now potentially left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those people were probably with Zipcar, which had a near-monopoly position in the city. The planned closure, pending consultation with employees, is a big blow to the vision that vehicle clubs in cities could reduce the need for owning a car. However, some analysts have noted that Zipcar’s exit need not spell the end for the idea in Britain. The Potential of Car Sharing Shared vehicle use is valued by city planners and green advocates as a way of reducing the problems associated with vehicle ownership. Typically, vehicles sit idle on the street for the vast majority of the time, using up space. They also require large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take transit more. That benefits cities – reducing congestion and pollution – and improves public health through increased activity. What Went Wrong? The company started in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its parent company's overall annual revenue, and a loss that reached £11.7m in 2024 gave no reason to continue. Avis Budget has said the closure is part of a “broader transformation across our international business, where we are taking deliberate steps to streamline operations, improve returns”. Zipcar’s most recent accounts noted revenues had declined as drivers took fewer and shorter trips. “These changes reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said. London's Unique Challenges Yet, several experts 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 comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs. Parking Permit Disparity: Residents in some boroughs pay just £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 annually, creating a significant barrier. “Our fees should be one-twentieth of a resident’s permit,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models in their place.” A European Example Nations in Europe offer models for London to follow. Germany enacted national shared mobility laws in 2017, providing a nationwide framework 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 trails at 0.7. “What we see is that shared mobility around the world, particularly on the continent, is growing,” said Bharath Devanathan of Invers. He suggested authorities should start to treat car sharing as a form of public transport, 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 be split into two camps: Fleet Operators: Which maintain their own cars. This includes 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 – 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 assessing the UK gap. Rory Brimmer, its UK head, 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. In the meantime, more people may choose to buy cars, and others 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 broader impact of its departure on community groups and the prospects of car-sharing in the UK.