🔗 Share this article What Has Gone So Awry at Zipcar – and the UK Vehicle-Sharing Market Dead? The community kitchen in Rotherhithe has distributed hundreds of cooked meals each week for the past two years to pensioners and vulnerable locals in southeast London. However, the group's plans face major disruption by the announcement that they will lose cars and vans on New Year’s Day. This organization depended on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles via smartphone. The company sent shockwaves through the capital when it said it would cease its UK business from 1 January. It will mean many helpers cannot pick up supplies from the Felix Project, that collects excess produce from grocery stores, cafes and restaurants. Other options are less convenient, costlier, or lack the same flexible hours. “It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the operational hurdle 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 Significant Setback for Urban Car-Sharing The community kitchen’s drivers are among more than half a million people in London registered as car club members, who could be left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those members were probably with Zipcar, which had a near-monopoly position in the city. This shutdown, pending consultation with employees, is a big blow to the vision that car sharing in cities could reduce the need for private vehicle ownership. However, some analysts have noted that Zipcar’s departure need not spell the end for the concept in Britain. The Promise of Shared Mobility Car sharing is valued by city planners and green advocates as a way of mitigating the problems associated with vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the street 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 – easing congestion and pollution – and improves public 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 revenues barely registered compared with its owner's total earnings, and a deficit that reached £11.7m in 2024 gave little incentive to continue. Avis Budget has said the closure is part of a “broader transformation across our international business, where we are taking targeted actions to streamline operations, improve returns”. Its latest financial reports noted revenues had declined as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which is dampening demand for discretionary spending,” it said. The Capital's Specific Challenges Yet, industry observers noted that London has specific problems that made it difficult for the sector to succeed. Patchwork Policies: With numerous local councils, car-club operators face a mosaic of varying processes and costs that complicate operations. New Costs: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs. Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a year’s electric car parking permit. A similar shared vehicle 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 Other European countries offer models 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 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 shared mobility around the world, particularly on the continent, is expanding,” said 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 one unnamed client 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 camps: Company-Owned Fleets: Which own or lease 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. Players include Britain’s Hiyacar and the US’s Getaround and Turo. Turo, 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. “A space exists 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 many across London will be without a convenient option. For Rotherhithe community kitchen, the next month will be a scramble to find a solution. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the future of shared mobility in the UK.