What Has Gone So Awry at Zipcar – and the UK Vehicle-Sharing Sector Finished?

A volunteer food project in Rotherhithe has distributed a large number of cooked meals each week for the past two years to elderly residents and needy locals in south London. Yet, the group's plans face major disruption by the news that they will lose cars and vans on New Year’s Day.

This organization depended on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles from the street. It sent shockwaves across London when it declared it would shut down its UK business from 1 January.

This means many volunteers cannot collect food from a major food charity, which gathers excess produce from grocery stores, cafes and restaurants. Obvious alternatives are further away, costlier, or lack the same flexible hours.

“It’s going to be affected massively,” stated Vimal Pandya, the project's founder. “Personally me and my team 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 are we going to carry on?”

A Significant Setback for City Vehicle Clubs

These volunteers are among more than half a million people in London who were car club members, now potentially left without easy use to vehicles, without the hassle and cost of ownership. Most of those people were probably with Zipcar, which had a near-monopoly position in the city.

The planned closure, subject to consultation with staff, is a big blow to the vision that car sharing in cities could reduce the need for owning a car. 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 valued by city planners and environmentalists as a way of reducing the problems associated with vehicle ownership. Most cars sit as two-tonne dead weights on the street for the vast majority of the time, using up space. They also require large carbon emissions to produce, and people without a vehicle tend to use active travel and take transit more. That helps urban areas – easing congestion and pollution – and boosts public health through increased activity.

What Went Wrong?

The company started in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK income were minimal compared with its owner's overall annual revenue, and a deficit that reached £11.7m in 2024 gave no reason to continue.

The parent company stated the closure is part of a “wider restructuring across our global operations, where we are taking deliberate steps to streamline operations, enhance profitability”.

Its latest financial reports said revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for discretionary spending,” it said.

London's Unique Hurdles

Yet, several experts noted that London has specific problems that made it much harder for the company and its rivals to succeed.

• Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of different procedures and prices that complicate operations.
• New Costs: The closure comes as electric cars start paying 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 per year, creating a significant barrier.

“We should literally be charged one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”

Lessons from Abroad

Nations in Europe offer examples for London to follow. Germany introduced national shared mobility laws 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 lags behind at 0.7.

“The evidence shows is that car sharing around the world, especially in Europe, is expanding,” commented Bharath Devanathan of Invers.

Devanathan said 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 looking at entering the London market: “Operators will fill this gap.”

The Future Landscape

Other players can be split into two camps:

1. Fleet Operators: Which maintain their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. Person-to-Person Rentals: 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 P2P service, is already weighing up the UK gap. Rory Brimmer, its UK head, said there was a “significant chance” 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 some time for other players to establish themselves. In the meantime, more people may choose to buy cars, and many across London will be left without access.

For Rotherhithe community kitchen, the next month will be a scramble to find a way. The logistical challenge caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the future of car-sharing in the UK.