🔗 Share this article What Exactly Has Gone So Awry at Zipcar – and the UK Vehicle-Sharing Market Dead? A volunteer food project in Rotherhithe has distributed hundreds of cooked meals each week for two years to pensioners and vulnerable locals in southeast London. However, the group's plans have been thrown into disarray by the news that they will not have 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 from the street. It sent shockwaves through the capital when it said it would cease its UK operations from 1 January. It will mean many helpers cannot collect food from a major food charity, which gathers excess produce from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, costlier, or lack the same convenient access. “The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are worried about the logistical challenge we will face. A lot of people like ours are going to struggle.” “Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?” A Major Blow for Urban Car-Sharing The community kitchen’s drivers are among more than half a million people in London who were car club members, now potentially 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, pending consultation with employees, is a serious setback to the vision that car sharing in urban areas could cut the need for owning a car. However, some experts also suggested 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 reducing the ills associated with vehicle ownership. Most cars sit as two-tonne dead weights 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 improves 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 revenues were minimal compared with its owner's total earnings, and a deficit that reached £11.7m in 2024 gave no reason to continue. The parent company stated the closure is part of a “wider restructuring across our global operations, where we are taking targeted actions to simplify processes, improve returns”. Its latest financial reports noted revenues had fallen as drivers took fewer and shorter trips. “These changes reflect the continuing effect of the economic squeeze, which continues to suppress demand for discretionary spending,” it said. London's Unique Hurdles However, industry observers noted that London has particular issues that made it much harder for the sector to succeed. Patchwork Policies: With numerous local councils, car-club operators face a patchwork of varying processes and costs that made it harder. Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding extra expenses. Unequal Parking Fees: Residents in some boroughs pay as little as £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 per year, creating a major disincentive. “Our fees should be 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.” A European Example Other European countries offer models for London to follow. Germany introduced national shared mobility laws in 2017, providing a nationwide framework for parking, subsidies and waivers. 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. “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 integrate it with train and bus stations. He added that one unnamed client was looking at 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. Person-to-Person Rentals: Which allow users to hire out their own vehicles via an app – a kind of Airbnb for cars. Examples 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. “There is a void 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 build momentum. For now, more people may feel forced to buy cars, and many across London will be without a convenient option. For the volunteers in Rotherhithe, the coming weeks will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the prospects of car-sharing in the UK.