What Exactly Has Gone So Wrong at Zipcar – and the UK Vehicle-Sharing Sector Finished?

The community kitchen in Rotherhithe has distributed a large number of cooked meals weekly for two years to elderly residents and needy locals in southeast London. Yet, their operations have been thrown into disarray by the news that they will not have cars and vans on New Year’s Day.

The group had relied on Zipcar, the car-sharing company that customers to access its fleet of vehicles from the street. It sent shockwaves through the capital when it declared it would cease its UK business from 1 January.

It will mean many volunteers will be unable to collect food from the Felix Project, which gathers surplus food from supermarkets, cafes and restaurants. Obvious alternatives are further away, more expensive, or do not offer the same convenient access.

“The impact will be massively,” stated Vimal Pandya, the project's founder. “Personally me and my team are worried about the logistical challenge we will face. A lot of people like ours will face difficulties.”

“Knowing the reality, they are all worried and thinking: ‘How will we continue?’”

A Major Blow for City Vehicle Clubs

The community kitchen’s drivers are part of more than half a million people in London who were car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those members were probably with Zipcar, which had a near-monopoly position in the city.

The planned closure, subject to consultation with employees, is a serious setback to the vision that car sharing in cities could cut the need for private vehicle ownership. However, some analysts have noted that Zipcar’s exit need not spell the end for the concept in Britain.

The Promise of Shared Mobility

Shared vehicle use is valued by many urbanists and green advocates as a way of reducing the problems linked to vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for 95% 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 improves people’s health through increased activity.

Understanding the Decline

The company started 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 overall annual revenue, and a deficit that reached £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 deliberate steps to simplify processes, enhance profitability”.

Its latest financial reports noted revenues had fallen as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the economic squeeze, which continues to suppress demand for non-essential services,” it said.

The Capital's Specific Hurdles

Yet, industry observers noted that London has specific problems that made it much harder for the company and its rivals to succeed.

• Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of varying processes and costs that made it harder.
• New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding unavoidable costs.
• Unequal Parking Fees: Locals in some boroughs pay just £63 for a year’s 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 resident’s permit,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models in their place.”

Lessons from Abroad

Nations in Europe offer models 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.

“What we see is that shared mobility around the world, especially in Europe, is growing,” commented 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 roughly be divided into two camps:

1. Company-Owned Fleets: Which maintain their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. Person-to-Person Rentals: 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 peer-to-peer platform, is already weighing up the UK gap. Rory Brimmer, its UK head, 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 a while for other players to establish themselves. In the meantime, more people may choose to buy cars, and many across London will be without a convenient option.

For the volunteers in Rotherhithe, the next month will be a rush to find a solution. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the future of shared mobility in the UK.