🔗 Share this article What Has Gone Awry at Zipcar – and the UK Car-Sharing Market Dead? The community kitchen in Rotherhithe has distributed hundreds of prepared dishes weekly for the past two years to elderly residents and needy locals in south London. Yet, their operations have been thrown into disarray by the news that they will not have access to New Year’s Day. The group depended on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles from the street. The company sent shockwaves through the capital when it said it would shut down its UK operations from 1 January. It will mean many helpers will be unable to collect food from the Felix Project, which gathers surplus food from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, more expensive, 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 concerned by the operational hurdle we will face. Many groups like ours will face difficulties.” “Faced with this reality, everyone is concerned and thinking: ‘How will we continue?’” A Major Blow for Urban Car-Sharing These volunteers are among more than half a million people in London registered as car club members, now potentially left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those people were probably with Zipcar, which held a dominant position in the city. The planned closure, pending consultation with employees, is a serious setback to the vision that vehicle clubs in cities could cut the need for owning a car. Yet, 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 many urbanists and green advocates as a way of reducing the problems associated with vehicle ownership. Most cars sit idle on the street for 95% 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 – reducing congestion and pollution – and improves public health through increased activity. 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 parent company's overall annual revenue, and a deficit that reached £11.7m in 2024 gave no reason 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. London's Unique Hurdles However, several experts noted that London has specific problems that made it much harder for the sector to succeed. Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of different procedures and prices that made it harder. New Costs: The closure comes as electric cars becoming liable for London’s congestion charge, adding extra expenses. 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 annually, creating a significant barrier. “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 introduce cleaner models in their place.” A European Example Nations in Europe 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 5.4 shared cars per 10,000 people, while France has 2.1 and Belgium has 6.3. The UK trails at 0.7. “The evidence shows 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 mass transit, and integrate 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 Other players can be split into two models: Fleet Operators: Which own or lease their own cars. This includes 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 – a kind of Airbnb for cars. Players include 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 build momentum. In the meantime, more people may choose to buy cars, and many across London will be left without access. For Rotherhithe community kitchen, the next month will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the future of car-sharing in the UK.