🔗 Share this article What Exactly Has Gone So Awry at Zipcar – Is the UK Vehicle-Sharing Market Dead? The community kitchen in Rotherhithe has distributed hundreds of prepared dishes weekly for two years to elderly residents and needy locals in south London. However, their operations face major disruption by the announcement that they will lose use of New Year’s Day. The group had relied on Zipcar, the car-sharing company that allowed its cars via smartphone. The company sent shockwaves across London when it said it would shut down its UK business from 1 January. It will mean many helpers will be unable to collect food from the Felix Project, that collects surplus food from supermarkets, cafes and restaurants. Other options are further away, more expensive, or do not offer the same flexible hours. “It’s going to be affected massively,” stated Vimal Pandya, the project's founder. “My team and I are concerned by the operational hurdle we will face. Many groups like ours will face difficulties.” “Knowing the reality, everyone is concerned and thinking: ‘How will we continue?’” A Major Blow for Urban Car-Sharing The community kitchen’s drivers are among over 500,000 people in London registered as car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those members 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 urban areas could reduce the need for private vehicle ownership. Yet, some analysts have noted that Zipcar’s departure need not mean the demise for the idea in Britain. The Potential of Car Sharing Car sharing is prized by many urbanists and environmentalists as a way of mitigating the ills linked to vehicle ownership. Typically, vehicles sit idle on the street for the vast majority of the time, occupying parking. They also involve large carbon emissions to produce, and people who do not own cars tend to use active travel and take transit more. That helps urban areas – reducing congestion and pollution – and boosts public health through increased activity. Understanding the Decline The company started in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's overall annual revenue, and a loss 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 global operations, where we are taking deliberate steps to simplify processes, improve returns”. Its latest financial reports said revenues had declined as drivers took less frequent, shorter trips. “These changes 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 difficult for the sector to succeed. Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of different procedures and prices that made it harder. New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding extra expenses. Parking Permit Disparity: Locals in some boroughs pay just £63 for a annual electric car parking permit. A similar shared vehicle 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 introduce cleaner models in their place.” A European Example Other European countries offer examples for London to follow. Germany introduced national car-sharing legislation in 2017, providing a unified system 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 lags behind at 0.7. “What we see is that shared mobility around the world, especially in Europe, is growing,” said 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 a potential operator was already seriously considering entering the London market: “There will be fill this gap.” The Future Landscape Other players can roughly be divided into two camps: Fleet Operators: Which own or lease their own cars. This includes 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. One company, 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. Yet, it could take a while for other players to establish themselves. For now, more people may feel forced to buy cars, and others across London will be left without access. For the volunteers in Rotherhithe, the next month will be a scramble to find a solution. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on community groups and the future of shared mobility in the UK.