🔗 Share this article What Has Gone So Wrong at Zipcar – Is the UK Car-Sharing Market Finished? A community kitchen in Rotherhithe has been delivering a large number of cooked meals each week for two years to elderly residents and needy locals in southeast London. Yet, their operations face major disruption by the announcement that they will lose cars and vans on New Year’s Day. This organization had relied on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles from the street. The company sent shockwaves through the capital when it said it would cease its UK business from 1 January. It will mean many helpers will be unable to pick up supplies from a major food charity, which gathers surplus food from grocery stores, cafes and restaurants. Other options are further away, costlier, or do not offer the same convenient access. “It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the logistical challenge we will face. Many groups like ours are going to struggle.” “Faced with this reality, they are all worried and thinking: ‘How are we going to carry on?” A Major Blow for Urban Car-Sharing These volunteers are among more than half a million people in London registered as 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. This shutdown, pending consultation with staff, is a big blow to the vision that car sharing in urban areas could reduce the need for owning a car. However, some experts also suggested that Zipcar’s departure need not mean the demise for the idea 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. Typically, vehicles sit idle on the street for the vast majority of the time, using up space. They also involve large carbon emissions to produce, and people without a vehicle 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 its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company'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 “wider restructuring across our global operations, where we are taking deliberate steps to simplify processes, enhance profitability”. Its latest financial reports said 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. 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: Across 33 boroughs, car-club operators face a mosaic of different procedures and prices that complicate operations. New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses. Unequal Parking Fees: Locals in some boroughs pay just £63 for a annual electric car parking permit. A floating car club would pay over £1,100 per year, creating a major disincentive. “We should literally be charged 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 Nations in Europe offer examples for London to follow. Germany enacted national car-sharing legislation in 2017, providing a nationwide framework 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 shared mobility around the world, particularly on the continent, is growing,” said Bharath Devanathan of Invers. He suggested authorities should start to treat car sharing as a form of mass transit, 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.” What Comes Next? The company’s competitors can be split 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 – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo. Turo, a US-headquartered peer-to-peer platform, 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. Yet, it could take some time for other players to build momentum. In the meantime, more people may choose to buy cars, and many across London will be left without access. For Rotherhithe community kitchen, the coming weeks 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 shared mobility in the UK.