What Exactly Has Gone Awry at Zipcar – and the UK Car-Sharing Market Dead?
The volunteer food project in Rotherhithe has provided hundreds of cooked meals each week for two years to pensioners and vulnerable locals in southeast London. Yet, the group's plans have been thrown into disarray by the news that they will not have access to New Year’s Day.
The group had relied on Zipcar, the car-sharing company that customers to access its cars via smartphone. It caused shock across London when it declared it would shut down its UK business from 1 January.
It will mean many helpers will be unable to collect food from a major food charity, which gathers excess produce from supermarkets, cafes and restaurants. Other options are further away, more expensive, or do not offer the same flexible hours.
“It’s going to be affected massively,” said Vimal Pandya, the project's founder. “My team and I are concerned by the logistical challenge we will face. Many groups like ours are going to struggle.”
“Faced with this reality, they are all worried and thinking: ‘How are we going to carry on?”
A Significant Setback 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, without the hassle and cost of ownership. Most of those members were probably with Zipcar, which held a dominant position in the city.
This shutdown, subject to consultation with staff, is a big blow to the vision that vehicle clubs in urban areas could reduce the need for private vehicle ownership. However, some analysts 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 mitigating the ills associated with vehicle ownership. Typically, vehicles sit idle on the side of the road for the vast majority of the time, using up space. They also involve large CO2 output to produce, and people without a vehicle tend to use active travel and take public transport more. That benefits cities – easing congestion and pollution – and improves public health through increased activity.
Understanding the Decline
Zipcar was founded 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 deficit that reached £11.7m in 2024 gave little incentive to continue.
Avis Budget has said the closure is part of a “wider restructuring across our global operations, where we are taking deliberate steps to simplify processes, improve returns”.
Its latest financial reports noted revenues had declined as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which continues to suppress demand for discretionary spending,” it said.
London's Unique Challenges
Yet, industry observers 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 patchwork of different procedures and prices that complicate operations.
- New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a year’s 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,” 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
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 exemptions. 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.
“The evidence shows is that shared mobility around the world, especially in Europe, is expanding,” said Bharath Devanathan of Invers.
He suggested 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 already seriously considering entering the London market: “There will be fill this gap.”
The Future Landscape
The company’s competitors can be split into two camps:
- Company-Owned Fleets: 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 – 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 head, 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 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 the volunteers in Rotherhithe, the coming weeks will be a rush to find a solution. The delivery problem caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the prospects of shared mobility in the UK.
