What Exactly Has Gone So Awry at Zipcar – and the UK Car-Sharing Sector Finished?
The volunteer food project in Rotherhithe has provided hundreds 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 announcement that they will lose access to New Year’s Day.
This organization depended on Zipcar, the car-sharing company that customers to access its fleet of vehicles from the street. The company caused shock across London when it said it would cease its UK operations from 1 January.
It will mean many helpers cannot collect food from a major food charity, which gathers surplus food from grocery stores, cafes and restaurants. Obvious alternatives are further away, costlier, or do not offer the same flexible hours.
“It’s going to be affected massively,” stated Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by the operational hurdle we will face. Many groups like ours will face difficulties.”
“Faced with this reality, everyone is concerned and thinking: ‘How will we continue?’”
A Major Blow for City Vehicle Clubs
The community kitchen’s drivers are part of over 500,000 people in London registered as car club members, who could be left without easy use to vehicles, avoiding the burden and cost of ownership. Most of those people were probably with Zipcar, which had a near-monopoly position in the city.
This shutdown, pending consultation with employees, is a serious setback to the vision that vehicle clubs in urban areas could cut the need for owning a car. However, some analysts also suggested that Zipcar’s exit need not spell the end for the concept in Britain.
The Promise of Shared Mobility
Car sharing is valued by many urbanists and environmentalists as a way of mitigating the problems associated with vehicle ownership. Most cars sit as two-tonne dead weights on the street for the vast majority of the time, occupying parking. They also require large carbon emissions to produce, and people who do not own cars tend to use active travel and take public transport more. That benefits cities – easing congestion and pollution – and improves people’s health through increased activity.
What Went Wrong?
Zipcar was founded in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK income were minimal compared with its owner's total earnings, and a loss 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 targeted actions to simplify processes, improve returns”.
Zipcar’s most recent accounts noted revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the economic squeeze, which continues to suppress demand for non-essential services,” it said.
The Capital's Specific Hurdles
However, 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 patchwork of varying processes and prices that made it harder.
- Congestion Charge: The closure comes as electric cars start paying London’s congestion charge, adding unavoidable costs.
- Parking Permit Disparity: Residents in some boroughs pay just £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 per year, 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 introduce cleaner models in their place.”
A European Example
Nations in Europe offer models for London to follow. Germany introduced national shared mobility laws in 2017, providing a nationwide framework for parking, subsidies and waivers. 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 car sharing around the world, especially in Europe, is expanding,” said Bharath Devanathan of Invers.
Devanathan said 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 already seriously considering entering the London market: “Operators will fill this gap.”
The Future Landscape
The company’s competitors can be split into two models:
- Fleet Operators: Which maintain their own cars. This includes 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 – similar to Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.
One company, a US-headquartered P2P service, is assessing the UK gap. Rory Brimmer, its UK managing director, 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.
However, it could take a while for other players to build momentum. For now, more people may choose to buy cars, and others across London will be without a convenient option.
For Rotherhithe community kitchen, the coming weeks will be a scramble to find a way. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of shared mobility in the UK.
