🔗 Share this article What Has Gone Awry at Zipcar – Is the UK Vehicle-Sharing Sector Finished? A volunteer food project in Rotherhithe has been delivering hundreds of cooked meals each week for two years to elderly residents and vulnerable locals in south London. However, the group's plans face major disruption by the announcement that they will not have access to New Year’s Day. The group had relied 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 pick up supplies from a major food charity, that collects surplus food from grocery stores, cafes and restaurants. Other options are less convenient, 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, everyone is concerned and thinking: ‘How are we going to carry on?” A Significant Setback for Urban Car-Sharing The community kitchen’s drivers are part of over 500,000 people in London who were car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. Most of those members were likely with Zipcar, which had a near-monopoly position in the city. The planned closure, subject to consultation with staff, is a serious setback to hopes that vehicle clubs in urban areas could cut the need for owning a car. Yet, some experts also suggested that Zipcar’s departure need not spell the end for the concept in Britain. The Promise of Car Sharing Car sharing is valued by many urbanists and environmentalists as a way of reducing the problems linked to vehicle ownership. Typically, vehicles sit idle on the side of the road for 95% of the time, occupying parking. They also involve large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take public transport more. That helps urban areas – reducing congestion and pollution – and boosts people’s 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 revenues barely registered compared with its owner's overall annual revenue, 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 deliberate steps to simplify processes, improve returns”. Its latest financial reports noted revenues had fallen as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which is dampening demand for non-essential services,” it said. London's Unique Challenges However, industry observers noted that London has specific problems that made it difficult for the company and its rivals to succeed. Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of different procedures and prices that made it harder. 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 annual electric car parking permit. A floating car club would pay over £1,100 annually, creating a major disincentive. “We should literally be charged one-twentieth of a private parking cost,” said 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 car-sharing legislation in 2017, providing a nationwide framework 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 car sharing around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers. He suggested authorities should start to treat car sharing as a form of mass transit, and link it with train and bus stations. He added that one unnamed client was looking at 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. 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. Turo, a US-headquartered P2P service, is already weighing up 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 some time for other players to establish themselves. For now, more people may feel forced to buy cars, and others 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 delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of car-sharing in the UK.