What Has Gone So Wrong at Zipcar – and the UK Car-Sharing Sector Finished?
The community kitchen in Rotherhithe has been delivering hundreds of cooked meals each week for two years to elderly residents and vulnerable locals in south London. However, their operations have been thrown into disarray by the announcement that they will lose use of New Year’s Day.
The group had relied on Zipcar, the car-sharing company that customers to access its fleet of vehicles from the street. The company caused shock through the capital when it declared it would cease its UK operations from 1 January.
It will mean many volunteers will be unable to pick up supplies from a major food charity, which gathers surplus food from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, costlier, or do not offer the same convenient access.
“The impact will be massively,” stated Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the logistical challenge we will face. Many groups like ours are going to struggle.”
“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 part of over 500,000 people in London who were car club members, now potentially left without convenient access to vehicles, without the hassle and cost of ownership. The vast majority of those members were probably with Zipcar, which held a dominant position in the city.
This shutdown, subject to 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 analysts have noted that Zipcar’s exit need not mean the demise for the concept in Britain.
The Promise of Car Sharing
Car sharing is valued by city planners and green advocates as a way of reducing the ills linked to vehicle ownership. Most cars sit idle on the side of the road for the vast majority of the time, occupying parking. They also involve large CO2 output to produce, and people without a vehicle tend to use active travel and take transit more. That benefits cities – reducing congestion and pollution – and improves people’s health through more exercise.
What Went Wrong?
The company started in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK income were minimal 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 “broader transformation across our international business, where we are taking deliberate steps to simplify processes, enhance profitability”.
Zipcar’s most recent accounts noted revenues had declined as drivers took fewer and shorter trips. “These changes reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said.
The Capital's Specific Hurdles
However, industry observers noted that London has particular issues that made it difficult for the sector to succeed.
- Inconsistent Rules: Across 33 boroughs, car-club operators face a patchwork of different procedures and costs that made it harder.
- Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
- 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 per year, creating a major disincentive.
“Our fees should be one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”
A European Example
Other European countries offer examples for London to follow. Germany introduced national shared mobility laws in 2017, providing a nationwide framework for parking, support 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 lags behind at 0.7.
“What we see is that car sharing around the world, particularly on the continent, is expanding,” commented Bharath Devanathan of Invers.
He suggested authorities should start to view vehicle clubs as a form of public transport, and link 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.”
What Comes Next?
The company’s competitors can roughly be divided into two models:
- Company-Owned Fleets: 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. Players include Britain’s Hiyacar and the US’s Getaround and Turo.
Turo, a US-headquartered peer-to-peer platform, is already weighing up 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.
However, it could take some time for other players to build momentum. For now, more people may feel forced to buy cars, and others across London will be left without access.
For Rotherhithe community kitchen, the coming weeks will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on vital services and the future of car-sharing in the UK.
