🔗 Share this article What Has Gone So Wrong at Zipcar – and the UK Vehicle-Sharing Market Finished? A volunteer food project in Rotherhithe has distributed a large number of prepared dishes weekly for the past two years to elderly residents and vulnerable locals in south London. Yet, the group's plans have been thrown into disarray by the announcement that they will not have access to New Year’s Day. This organization depended on Zipcar, the app-based vehicle rental service that allowed its cars from the street. The company caused shock through the capital when it said it would cease its UK business from 1 January. This means many volunteers cannot collect food from a major food charity, that collects excess produce from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, costlier, or do not offer the same flexible hours. “The impact will be massively,” said 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 are going to struggle.” “Faced with this reality, everyone is concerned and thinking: ‘How are we going to carry on?” 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, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. The vast majority of those members were likely with Zipcar, which had a near-monopoly position in the city. This shutdown, pending consultation with staff, is a serious setback to hopes that car sharing in urban areas could reduce the need for owning a car. Yet, some experts have noted that Zipcar’s departure need not spell the end for the idea in Britain. The Promise of Shared Mobility Car sharing is prized by city planners and environmentalists as a way of mitigating the problems associated with vehicle ownership. Typically, vehicles sit idle on the side of the road for the vast majority of the time, using up space. They also involve large CO2 output to produce, and people without a vehicle tend to use active travel and take transit more. That helps urban areas – easing congestion and pollution – and boosts people’s health through more exercise. What Went Wrong? Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its owner's overall annual revenue, and a deficit that grew to £11.7m in 2024 gave little incentive to continue. The parent company stated the closure is part of a “broader transformation across our global operations, where we are taking deliberate steps to streamline operations, improve returns”. Zipcar’s most recent accounts said revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the ongoing impact of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said. The Capital's Specific Challenges Yet, industry observers 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 patchwork of different procedures and prices that made it harder. Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding unavoidable costs. Parking Permit Disparity: 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 annually, creating a significant barrier. “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 examples for London to follow. Germany introduced national car-sharing legislation in 2017, providing a nationwide framework for parking, subsidies 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, especially in Europe, is growing,” commented Bharath Devanathan of Invers. Devanathan said authorities should start to view vehicle clubs as a form of mass transit, and integrate it with train and bus stations. He added that a potential operator was looking at entering the London market: “There will be fill this gap.” What Comes Next? The company’s competitors can be split into two models: Fleet Operators: Which maintain 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 – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo. Turo, a US-headquartered P2P service, is already weighing up the UK gap. Rory Brimmer, its UK head, said there was a “big opportunity” 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. For now, more people may choose to buy cars, and others across London will be left without access. For the volunteers in Rotherhithe, the coming weeks will be a rush to find a way. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on vital services and the prospects of car-sharing in the UK.