🔗 Share this article What Has Gone So Awry at Zipcar – Is the UK Vehicle-Sharing Market Dead? The volunteer food project in Rotherhithe has distributed a large number of cooked meals each week for two years to pensioners and vulnerable locals in southeast London. However, the group's plans have been thrown into disarray by the news that they will lose cars and vans on New Year’s Day. This organization had relied on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles from the street. The company caused shock across London when it declared it would cease its UK business from 1 January. This means many volunteers cannot pick up supplies from a major food charity, that collects surplus food from grocery stores, cafes and restaurants. Obvious alternatives are further away, costlier, or lack the same flexible hours. “The impact will be massively,” stated Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the operational hurdle we will face. A lot of people like ours are going to struggle.” “Faced with this reality, they are all worried and thinking: ‘How will we continue?’” A Significant Setback for Urban Car-Sharing These volunteers are part of over 500,000 people in London registered as car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those people were likely with Zipcar, which had a near-monopoly position in the city. This shutdown, pending consultation with employees, is a big blow to the vision that vehicle clubs in urban areas could cut the need for private vehicle ownership. However, some experts have noted that Zipcar’s exit need not mean the demise for the concept in Britain. The Promise of Shared Mobility Shared vehicle use is prized by city planners and environmentalists as a way of reducing the problems associated with vehicle ownership. Most cars sit idle on the street for 95% 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 – reducing congestion and pollution – and boosts public health through increased activity. What Went Wrong? Zipcar was founded in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK income were minimal 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 deliberate steps to simplify processes, enhance profitability”. Zipcar’s most recent accounts noted 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. The Capital's Specific Challenges However, several experts noted that London has specific problems that made it difficult for the company and its rivals to succeed. Inconsistent Rules: Across 33 boroughs, car-club operators face a patchwork of varying processes and prices that complicate operations. New Costs: The closure coincides with electric cars becoming liable for 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. “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 Nations in Europe offer examples for London to follow. Germany enacted national car-sharing legislation 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 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 a potential operator was looking at 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 own or lease their own cars. Examples 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 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. “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 build momentum. 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 rush to find a solution. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the prospects of car-sharing in the UK.