What Exactly Has Gone Awry at Zipcar – and the UK Car-Sharing Market Dead?
A volunteer food project in Rotherhithe has distributed hundreds of prepared dishes weekly for two years to pensioners and needy locals in southeast London. However, their operations have been thrown into disarray by the news that they will lose access to New Year’s Day.
The group depended on Zipcar, the car-sharing company that customers to access its fleet of vehicles via smartphone. It caused shock through the capital when it said it would shut down its UK operations from 1 January.
It will mean many helpers cannot collect food from a major food charity, that collects surplus food from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, costlier, or lack the same flexible hours.
“The impact will be massively,” said Vimal Pandya, the project's founder. “My team and I are concerned by the logistical challenge we will face. A lot of people 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 Urban Car-Sharing
The community kitchen’s drivers are part of more than half a million people in London who were car club members, now potentially left without easy use to vehicles, avoiding the burden and cost of ownership. The vast majority of those people were likely with Zipcar, which had a near-monopoly position in the city.
This shutdown, subject to consultation with staff, is a serious setback to hopes that vehicle clubs in cities could reduce the need for owning a car. Yet, some experts also suggested that Zipcar’s exit need not mean the demise for the idea in Britain.
The Potential of Shared Mobility
Shared vehicle use is prized by many urbanists and green advocates as a way of mitigating the ills associated with vehicle ownership. Most cars sit idle on the street for the vast majority of the time, occupying parking. They also involve large CO2 output to produce, and people without a vehicle tend to walk, cycle and take transit more. That benefits cities – easing congestion and pollution – and improves people’s health through more exercise.
Understanding the Decline
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 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 “broader transformation across our international business, where we are taking deliberate steps to simplify processes, improve returns”.
Zipcar’s most recent accounts noted revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the economic squeeze, which is dampening demand for discretionary spending,” it said.
The Capital's Specific Challenges
However, several experts noted that London has particular issues that made it much harder for the sector to succeed.
- Inconsistent Rules: 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 becoming liable for London’s congestion charge, adding unavoidable costs.
- Parking Permit Disparity: Residents in some boroughs pay as little as £63 for a annual electric car parking permit. A similar shared vehicle 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.”
Lessons from Abroad
Other European countries offer models for London to follow. Germany enacted national shared mobility laws in 2017, providing a unified system for parking, subsidies 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.
“The evidence shows is that shared mobility around the world, particularly on the continent, is growing,” commented Bharath Devanathan of Invers.
He suggested authorities should start to treat car sharing as a form of mass transit, and integrate it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “There will be fill this gap.”
What Comes Next?
The company’s competitors 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 – 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 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.
However, it could take a while for other players to build momentum. In the meantime, more people may choose to buy cars, and many across London will be left without access.
For Rotherhithe community kitchen, the coming weeks will be a scramble to find a way. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the prospects of shared mobility in the UK.