What Has Gone So Wrong at Zipcar – Is the UK Vehicle-Sharing Sector Dead?

A community kitchen in Rotherhithe has provided a large number of cooked meals each week for the past two years to pensioners and vulnerable locals in south London. Yet, the group's plans have been thrown into disarray by the announcement that they will lose use of New Year’s Day.

The group depended on Zipcar, the car-sharing company that allowed its fleet of vehicles from the street. It sent shockwaves across London when it said it would cease its UK business from 1 January.

This means many helpers cannot collect food from a major food charity, which gathers surplus food from supermarkets, cafes and restaurants. Other options are less convenient, costlier, or do not offer the same flexible hours.

“It’s going to be affected massively,” said Vimal Pandya, the project's founder. “Personally me and my team are worried about the operational hurdle we will face. Many groups like ours are going to struggle.”

“Faced with this reality, everyone is concerned and thinking: ‘How are we going to carry on?”

A Major Blow for City Vehicle Clubs

These volunteers are part of over 500,000 people in London registered as car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those people were probably with Zipcar, which had a near-monopoly position in the city.

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

The Potential of Car Sharing

Car sharing is prized by city planners and environmentalists as a way of reducing the ills associated with vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the street for 95% of the time, using up space. They also require large CO2 output to produce, and people without a vehicle tend to use active travel and take transit more. That benefits cities – reducing congestion and pollution – and improves public health through more exercise.

What Went Wrong?

The company started in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's total earnings, and a loss that reached £11.7m in 2024 gave little incentive 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, enhance profitability”.

Its latest financial reports noted revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said.

London's Unique Hurdles

Yet, industry observers 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.
• Congestion Charge: The closure comes as electric cars start paying London’s congestion charge, adding unavoidable costs.
• Unequal Parking Fees: Residents in some boroughs pay just £63 for a annual electric car parking permit. A floating car club would pay over £1,100 annually, creating a significant barrier.

“We should literally be charged one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.”

A European Example

Other European countries offer examples 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 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 expanding,” said 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.”

What Comes Next?

Other players can roughly be divided into two camps:

1. Company-Owned Fleets: Which maintain their own cars. This includes 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. Examples Britain’s Hiyacar and the US’s Getaround and Turo.

Turo, a US-headquartered P2P service, is already weighing up the UK gap. Rory Brimmer, its UK managing director, said there was a “big opportunity” to win more users. “There is a void that is going to need to be filled, because London still needs to move,” Brimmer said.

Yet, it could take some time for other players to establish themselves. For now, more people may feel forced to buy cars, and many across London will be without a convenient option.

For Rotherhithe community kitchen, the next month will be a rush to find a way. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of car-sharing in the UK.