What Has Gone Awry at Zipcar – Is the UK Car-Sharing Market Finished?
A community kitchen in Rotherhithe has provided a large number of cooked meals each week for two years to pensioners and vulnerable locals in south London. However, the group's plans have been thrown into disarray by the news that they will lose access to New Year’s Day.
The group had relied on Zipcar, the car-sharing company that allowed its cars via smartphone. The company caused shock through the capital when it said it would cease its UK business from 1 January.
It will mean many helpers will be unable to collect food from the Felix Project, which gathers surplus food from grocery stores, cafes and restaurants. Other options are further away, more expensive, or do not offer the same convenient access.
“The impact will be massively,” stated Vimal Pandya, the project's founder. “Personally me and my team are worried about the operational hurdle we will face. A lot of people like ours will face difficulties.”
“Faced with this reality, they are all worried and thinking: ‘How are we going to carry on?”
A Significant Setback for City Vehicle Clubs
The community kitchen’s drivers are part of over 500,000 people in London who were car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those people were probably with Zipcar, which held a dominant position in the city.
The planned closure, pending consultation with staff, is a big blow to the vision that vehicle clubs in cities could reduce the need for owning a car. Yet, some analysts also suggested that Zipcar’s departure need not spell the end for the concept in Britain.
The Potential of Shared Mobility
Car sharing is prized by city planners and environmentalists as a way of reducing 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 involve large carbon emissions to produce, and people who do not own cars tend to use active travel and take transit more. That benefits cities – reducing congestion and pollution – and improves public health through increased activity.
Understanding the Decline
The company started in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's total earnings, and a deficit that reached £11.7m in 2024 gave no reason to continue.
Avis Budget has said the closure is part of a “wider restructuring across our international business, where we are taking targeted actions to simplify processes, enhance profitability”.
Zipcar’s most recent accounts noted revenues had declined as drivers took fewer and shorter trips. “These changes reflect the continuing effect of the economic squeeze, which is dampening demand for non-essential services,” it said.
London's Unique Hurdles
Yet, industry observers noted that London has particular issues that made it much harder for the company and its rivals to succeed.
- Patchwork Policies: Across 33 boroughs, car-club operators face a patchwork of varying processes and prices that made it harder.
- Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
- Unequal Parking Fees: Locals in some boroughs pay just £63 for a annual electric car parking permit. A similar shared vehicle would pay over £1,100 annually, creating a significant barrier.
“We should literally be charged one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.”
Lessons from Abroad
Other European countries offer models for London to follow. Germany enacted national car-sharing legislation in 2017, providing a unified system 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 trails at 0.7.
“What we see is that shared mobility around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers.
Devanathan said authorities should start to view vehicle clubs as a form of public transport, and link it with train and bus stations. He added that one unnamed client was looking at entering the London market: “There will be fill this gap.”
What Comes Next?
The company’s competitors can roughly be divided into two camps:
- Company-Owned Fleets: Which own or lease 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. Examples Britain’s Hiyacar and the US’s Getaround and Turo.
Turo, a US-headquartered peer-to-peer platform, is assessing the UK gap. Rory Brimmer, its UK managing director, 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.
However, it could take some time 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 delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the future of car-sharing in the UK.
