What Has Gone Awry at Zipcar – and the UK Vehicle-Sharing Market Finished?

The community kitchen in Rotherhithe has been delivering hundreds of prepared dishes each week for the past two years to pensioners and vulnerable locals in southeast London. Yet, the group's plans face major disruption by the news that they will not have access to New Year’s Day.

This organization depended on Zipcar, the car-sharing company that allowed its cars from the street. It sent shockwaves through the capital when it said it would shut down its UK business from 1 January.

It will mean many helpers cannot pick up supplies from a major food charity, that collects surplus food from grocery stores, cafes and restaurants. Other options are further away, more expensive, or do not offer the same convenient access.

“It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by the logistical challenge we will face. Many groups 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 Urban Car-Sharing

These volunteers are part of over 500,000 people in London registered as car club members, who could be left without easy use 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, subject to consultation with staff, is a serious setback to hopes that vehicle clubs in urban areas could cut the need for owning a car. However, some experts have noted that Zipcar’s departure need not spell the end for the idea in Britain.

The Promise of Car Sharing

Car sharing is prized by city planners and green advocates as a way of reducing the ills associated with vehicle ownership. Most cars sit idle on the street for 95% of the time, occupying parking. 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 boosts people’s health through more exercise.

Understanding the Decline

The company started in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's total earnings, and a deficit that grew to £11.7m in 2024 gave little incentive to continue.

Avis Budget has said the closure is part of a “wider restructuring across our international business, where we are taking targeted actions to simplify processes, enhance profitability”.

Its latest financial reports said revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said.

London's Unique Challenges

However, several experts noted that London has specific problems that made it much harder for the sector to succeed.

• Patchwork Policies: With numerous local councils, car-club operators face a patchwork of different procedures and prices that made it harder.
• New Costs: The closure comes as electric cars start paying London’s congestion charge, adding extra expenses.
• Unequal Parking Fees: Residents in some boroughs pay just £63 for a annual 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 private parking cost,” 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 enacted national shared mobility laws in 2017, providing a nationwide framework for parking, support 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 trails at 0.7.

“What we see is that car sharing around the world, especially in Europe, is expanding,” said Bharath Devanathan of Invers.

He suggested authorities should start to treat car sharing as a form of mass transit, and link it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “There will be fill this gap.”

What Comes Next?

The company’s competitors can roughly be divided into two models:

1. Fleet Operators: Which maintain their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. 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.

One company, a US-headquartered P2P service, is assessing the UK gap. Rory Brimmer, its UK head, said there was a “big opportunity” to win more users. “A space exists 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. In the meantime, more people may choose to buy cars, and others across London will be without a convenient option.

For the volunteers in Rotherhithe, the coming weeks will be a rush to find a way. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the future of shared mobility in the UK.