What Has Gone So Wrong at Zipcar – Is the UK Vehicle-Sharing Market Dead?
The volunteer food project in Rotherhithe has been delivering hundreds of prepared dishes each week for the past two years to elderly residents and needy locals in south 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 cars from the street. It caused shock through the capital when it said it would cease its UK operations from 1 January.
It will mean many volunteers will be unable to pick up supplies from a major food charity, that collects excess produce from supermarkets, cafes and restaurants. Obvious alternatives 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 will face difficulties.”
“Faced with this reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Significant Setback for Urban Car-Sharing
These volunteers are among over 500,000 people in London registered as car club members, now potentially left without easy use 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.
This shutdown, subject to consultation with staff, is a serious setback to the vision that car sharing in cities could cut the need for private vehicle ownership. 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 many urbanists and green advocates as a way of reducing the problems associated with vehicle ownership. Typically, vehicles sit idle on the side of the road for the vast majority of the time, occupying parking. They also require large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take public transport more. That helps urban areas – reducing congestion and pollution – and improves public health through more exercise.
Understanding the Decline
The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's overall annual revenue, and a loss that grew to £11.7m in 2024 gave little incentive to continue.
The parent company stated the closure is part of a “wider restructuring across our international business, where we are taking deliberate steps to streamline operations, improve returns”.
Its latest financial reports said revenues had fallen as drivers took fewer and 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 Challenges
Yet, industry observers noted that London has specific problems that made it difficult for the company and its rivals to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a patchwork of different procedures and prices that made it harder.
- New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: 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 major disincentive.
“Our fees should be one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”
Lessons from Abroad
Nations in Europe offer examples 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 lags behind at 0.7.
“What we see is that car sharing 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 public transport, 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 models:
- Company-Owned Fleets: Which maintain their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Peer-to-Peer Services: Which allow users to hire 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 managing director, 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 a while for other players to establish themselves. In the meantime, more people may feel forced to buy cars, and others across London will be left without access.
For Rotherhithe community kitchen, the next month will be a scramble to find a way. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the future of shared mobility in the UK.
