🔗 Share this article What Has Gone So Awry at Zipcar – and the UK Car-Sharing Market Finished? The volunteer food project in Rotherhithe has been delivering a large number of prepared dishes each week for the past two years to elderly residents and needy locals in southeast 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. The group depended on Zipcar, the car-sharing company that customers to access its cars from the street. It sent shockwaves across London when it declared it would shut down its UK business from 1 January. It will mean many helpers cannot collect food from a major food charity, that collects surplus food from supermarkets, cafes and restaurants. Other options are further away, more expensive, or lack the same flexible hours. “It’s going to be affected massively,” stated Vimal Pandya, the project's founder. “Personally me and my team are worried about the operational hurdle we will face. Many groups like ours will face difficulties.” “Faced with this reality, they are all worried and thinking: ‘How will we continue?’” A Significant Setback 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 easy use to vehicles, avoiding the burden and cost of ownership. Most of those people were probably with Zipcar, which had a near-monopoly position in the city. The planned closure, subject to consultation with employees, is a big blow to hopes that car sharing in urban areas could reduce the need for owning a car. However, some analysts also suggested that Zipcar’s departure need not mean the demise for the idea in Britain. The Potential of Shared Mobility Car sharing is valued by many urbanists and environmentalists as a way of mitigating the problems linked to 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 who do not own cars tend to walk, cycle and take transit more. That benefits cities – easing congestion and pollution – and improves people’s health through increased activity. Understanding the Decline The company started 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 grew to £11.7m in 2024 gave no reason to continue. Avis Budget has said the closure is part of a “wider restructuring across our international business, where we are taking deliberate steps to streamline operations, improve returns”. Its latest financial reports said revenues had declined as drivers took fewer and shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for discretionary spending,” it said. London's Unique Challenges However, industry observers noted that London has particular issues that made it difficult for the company and its rivals to succeed. Patchwork Policies: With numerous local councils, car-club operators face a patchwork of different procedures and prices that complicate operations. Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding extra expenses. Parking Permit Disparity: 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 annually, 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 Nations in Europe offer models for London to follow. Germany enacted national car-sharing legislation in 2017, providing a unified system for parking, support and waivers. Now, the country has several 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, particularly on the continent, 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 looking at entering the London market: “There will be fill this gap.” The Future Landscape The company’s competitors can roughly be divided 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. Person-to-Person Rentals: Which allow users to rent out their own vehicles via an app – similar to Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo. One company, a US-headquartered P2P service, is already weighing up the UK gap. Rory Brimmer, its UK head, 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 establish themselves. In the meantime, more people may feel forced to buy cars, and others across London will be without a convenient option. For the volunteers in Rotherhithe, the coming weeks will be a scramble to find a way. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of car-sharing in the UK.