🔗 Share this article What Exactly Has Gone So Wrong at Zipcar – Is the UK Vehicle-Sharing Sector Dead? A volunteer food project in Rotherhithe has been delivering a large number of cooked meals weekly for two years to pensioners and vulnerable locals in southeast London. Yet, the group's plans face major disruption by the news that they will lose use of New Year’s Day. The group depended on Zipcar, the car-sharing company that customers to access its fleet of vehicles from the street. It caused shock through the capital when it said it would cease its UK business from 1 January. It will mean many volunteers will be unable to collect food from a major food charity, that collects excess produce from grocery stores, cafes and restaurants. Other options are less convenient, more expensive, or do not offer the same flexible hours. “The impact will be massively,” stated Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by the logistical challenge we will face. Many groups like ours will face difficulties.” “Faced with this reality, they are all worried and thinking: ‘How will we continue?’” A Significant Setback for City Vehicle Clubs These volunteers are among more than half a million people in London registered as car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. Most of those people were likely with Zipcar, which held a dominant position in the city. The planned closure, pending consultation with employees, is a serious setback to hopes that vehicle clubs in urban areas could reduce the need for private vehicle ownership. However, some analysts also suggested that Zipcar’s departure need not mean the demise for the concept in Britain. The Potential of Shared Mobility Shared vehicle use is valued by city planners and green advocates as a way of mitigating the problems associated with vehicle ownership. Most cars sit idle on the side of the road for 95% 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 – reducing congestion and pollution – and boosts people’s health through more exercise. Understanding the Decline Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income 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. Avis Budget has said the closure is part of a “wider restructuring across our international business, where we are taking targeted actions to streamline operations, improve returns”. Zipcar’s most recent accounts said revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which is dampening demand for non-essential services,” it said. London's Unique Hurdles However, industry observers noted that London has particular issues that made it difficult for the company and its rivals to succeed. Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of varying processes and prices that made it harder. New Costs: The closure comes as electric cars becoming liable for 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 floating car club would pay over £1,100 annually, creating a major disincentive. “Our fees should be one-twentieth of a resident’s permit,” argued 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 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. “What we see is that car sharing 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 public transport, and integrate it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “There will be fill this gap.” What Comes Next? Other players can be split into two models: Company-Owned Fleets: 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 rent out their own vehicles via an app – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo. One company, 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. Yet, it could take a while for other players to establish themselves. For now, more people may choose to buy cars, and others across London will be left without access. For Rotherhithe community kitchen, the coming weeks will be a rush to find a solution. The delivery problem caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the prospects of car-sharing in the UK.