🔗 Share this article What Has Gone So Wrong at Zipcar – and the UK Car-Sharing Market Finished? A volunteer food project in Rotherhithe has been delivering a large number of prepared dishes each week for the past two years to elderly residents and needy locals in southeast London. Yet, the group's plans have been thrown into disarray by the announcement that they will lose use of New Year’s Day. The group had relied on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles via smartphone. It sent shockwaves through the capital when it said it would shut down its UK business from 1 January. It will mean many helpers cannot collect food 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 convenient access. “The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by 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 will we continue?’” A Significant Setback for City Vehicle Clubs The community kitchen’s drivers 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 held a dominant position in the city. This shutdown, subject to consultation with employees, is a serious setback to hopes that car sharing in cities could cut the need for owning a car. Yet, some analysts have noted that Zipcar’s departure need not mean the demise for the concept in Britain. The Potential of Car Sharing Shared vehicle use is valued by many urbanists and environmentalists as a way of reducing the problems linked to vehicle ownership. Most cars sit idle on the street for the vast majority of the time, occupying parking. They also require large CO2 output to produce, and people who do not own cars tend to use active travel and take public transport more. That helps urban areas – reducing congestion and pollution – and improves public health through more exercise. What Went Wrong? The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its owner's total earnings, and a deficit that grew to £11.7m in 2024 gave little incentive 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 fewer and shorter trips. “These changes reflect the continuing effect of the economic squeeze, which is dampening demand for non-essential services,” it said. The Capital's Specific Challenges Yet, industry observers noted that London has particular issues that made it much harder for the sector to succeed. Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of varying processes and costs that made it harder. New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs. Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 annually, creating a significant barrier. “Our fees should be 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 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. “What we see is that car sharing around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers. Devanathan said authorities should start to treat car sharing as a form of mass transit, and link it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “Operators will fill this gap.” What Comes Next? Other players can roughly be divided into two camps: 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. Examples Britain’s Hiyacar and the US’s Getaround and Turo. Turo, a US-headquartered P2P service, is assessing the UK gap. Rory Brimmer, its UK head, 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. Yet, it could take a while for other players to establish themselves. For now, more people may choose to buy cars, and many across London will be without a convenient option. For the volunteers in Rotherhithe, the coming weeks will be a rush to find a solution. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on community groups and the future of shared mobility in the UK.