What Has Gone Awry at Zipcar – Is the UK Vehicle-Sharing Market Finished?
A volunteer food project in Rotherhithe has been delivering a large number of cooked meals each week for the past two years to elderly residents and needy locals in southeast London. However, their operations face major disruption by the announcement that they will not have use of New Year’s Day.
The group depended on Zipcar, the app-based vehicle rental service that customers to access its cars from the street. It sent shockwaves across London when it declared it would cease its UK operations from 1 January.
This means many helpers will be unable to pick up supplies from the Felix Project, that collects surplus food from supermarkets, cafes and restaurants. Obvious alternatives are further away, more expensive, or do not offer the same convenient access.
“It’s going to be affected massively,” stated Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the logistical challenge we will face. A lot of people like ours will face difficulties.”
“Knowing the reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Major Blow for City Vehicle Clubs
The community kitchen’s drivers are among over 500,000 people in London who were car club members, now potentially left without convenient access to vehicles, without the hassle and cost of ownership. The vast majority of those members were likely with Zipcar, which held a dominant position in the city.
The planned closure, pending consultation with employees, is a big blow to hopes that vehicle clubs in cities could cut the need for owning a car. However, some experts also suggested that Zipcar’s exit need not mean the demise for the concept in Britain.
The Promise of Shared Mobility
Car sharing is valued by many urbanists and green advocates as a way of mitigating the problems associated with vehicle ownership. Most cars sit as two-tonne dead weights on the street for 95% of the time, occupying parking. They also require large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take transit more. That benefits cities – easing congestion and pollution – and boosts public health through more exercise.
What Went Wrong?
Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's overall annual revenue, and a deficit that grew to £11.7m in 2024 gave no reason to continue.
The parent company stated the closure is part of a “broader transformation across our global operations, where we are taking deliberate steps to simplify processes, enhance profitability”.
Its latest financial reports noted revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said.
London's Unique Challenges
Yet, several experts 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 mosaic of varying processes and costs that complicate operations.
- New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding extra expenses.
- Parking Permit Disparity: Residents 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 major disincentive.
“Our fees should be one-twentieth of a private parking cost,” 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 examples for London to follow. Germany introduced national shared mobility laws in 2017, providing a unified system 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 trails at 0.7.
“The evidence shows is that shared mobility around the world, particularly on the continent, is growing,” commented Bharath Devanathan of Invers.
Devanathan said authorities should start to treat car sharing as a form of public transport, 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.”
The Future Landscape
Other players can roughly be divided into two models:
- Fleet Operators: Which own or lease 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 – similar to 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 assessing the UK gap. Rory Brimmer, its UK managing director, 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.
However, 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 left without access.
For the volunteers in Rotherhithe, the next month will be a rush to find a solution. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on community groups and the prospects of car-sharing in the UK.
