What Has Gone Awry at Zipcar – Is the UK Car-Sharing Sector Finished?
The community kitchen in Rotherhithe has provided a large number of prepared dishes weekly for two years to elderly residents and vulnerable locals in south London. However, their operations face major disruption by the announcement that they will lose cars and vans on New Year’s Day.
The group had relied on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles via smartphone. The company sent shockwaves through the capital when it declared it would shut down its UK operations from 1 January.
It will mean many helpers will be unable to collect food from the Felix Project, which gathers surplus food from supermarkets, cafes and restaurants. Other options are less convenient, costlier, or lack the same convenient access.
“The impact will be massively,” said Vimal Pandya, the project's founder. “My team and I are worried about the operational hurdle we will face. A lot of people like ours are going to struggle.”
“Faced with this reality, everyone is concerned and thinking: ‘How will we continue?’”
A Significant Setback for Urban Car-Sharing
The community kitchen’s drivers 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. Most of those people were likely with Zipcar, which held a dominant position in the city.
The planned closure, subject to consultation with employees, is a serious setback to the vision that vehicle clubs in urban areas could reduce the need for owning a car. Yet, some analysts have noted that Zipcar’s departure need not spell the end for the concept in Britain.
The Promise of Shared Mobility
Car sharing is prized by many urbanists and environmentalists as a way of mitigating 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 require large carbon emissions to produce, and people who do not own cars tend to use active travel and take transit more. That helps urban areas – reducing congestion and pollution – and improves public health through increased activity.
Understanding the Decline
Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's total earnings, and a loss that grew to £11.7m in 2024 gave little incentive 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 simplify processes, improve returns”.
Zipcar’s most recent accounts said revenues had fallen as drivers took less frequent, 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
However, several experts noted that London has particular issues that made it difficult for the sector to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of varying processes and prices that made it harder.
- New Costs: The closure comes as electric cars start paying London’s congestion charge, adding unavoidable costs.
- Parking Permit Disparity: Locals in some boroughs pay as little as £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 per year, creating a significant barrier.
“We should literally be charged one-twentieth of a private parking cost,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.”
Lessons from Abroad
Nations in Europe offer models for London to follow. Germany introduced national car-sharing legislation in 2017, providing a nationwide framework for parking, support 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 lags behind at 0.7.
“What we see is that car sharing around the world, especially in Europe, is growing,” said Bharath Devanathan of Invers.
Devanathan said authorities should start to view vehicle clubs as a form of public transport, and integrate it with train and bus stations. He added that one unnamed client was looking at entering the London market: “Operators will fill this gap.”
What Comes Next?
Other players can roughly be divided into two models:
- Company-Owned Fleets: Which own or lease 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 – a kind of Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.
One company, a US-headquartered P2P service, 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. In the meantime, more people may choose to buy cars, and many across London will be without a convenient option.
For Rotherhithe community kitchen, 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 vital services and the prospects of shared mobility in the UK.