🔗 Share this article What Has Gone Wrong at Zipcar – and the UK Car-Sharing Sector Finished? The community kitchen in Rotherhithe has been delivering a large number of prepared dishes weekly for the past two years to elderly residents and needy locals in south London. However, the group's plans face major disruption by the announcement that they will lose access to New Year’s Day. The group depended on Zipcar, the car-sharing company that customers to access its fleet of vehicles via smartphone. It caused shock through the capital when it said it would cease its UK operations from 1 January. It will mean many volunteers cannot pick up supplies from the Felix Project, that collects surplus food from supermarkets, cafes and restaurants. Other options are further away, costlier, or do not offer the same convenient access. “The impact will be massively,” said Vimal Pandya, the community kitchen’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, everyone is concerned and thinking: ‘How are we going to carry on?” A Major Blow for City Vehicle Clubs These volunteers are part of more than half a million people in London registered as car club members, who could be left without convenient access to vehicles, avoiding the burden 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, subject to consultation with staff, is a serious setback to hopes that vehicle clubs in cities could reduce the need for private vehicle ownership. However, some analysts have noted that Zipcar’s departure need not spell the end for the idea in Britain. The Potential of Car Sharing Shared vehicle use is prized by city planners and environmentalists as a way of reducing the ills linked to vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for 95% of the time, occupying parking. They also involve large CO2 output to produce, and people without a vehicle tend to walk, cycle and take transit more. That benefits cities – easing congestion and pollution – and improves people’s health through more exercise. What Went Wrong? The company started in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK income were minimal compared with its owner's overall annual revenue, and a loss that grew to £11.7m in 2024 gave no reason to continue. Avis Budget has said the closure is part of a “broader transformation across our international business, where we are taking targeted actions to simplify processes, enhance profitability”. Its latest financial reports 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 discretionary spending,” it said. London's Unique Challenges Yet, several experts noted that London has specific problems that made it much harder for the sector to succeed. Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of different procedures and costs that complicate operations. Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs. 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 annually, creating a significant barrier. “Our fees should be one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.” Lessons from Abroad Other European countries offer examples for London to follow. Germany introduced national shared mobility laws in 2017, providing a unified system 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 treat car sharing as a form of public transport, and link it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “Operators will fill this gap.” The Future Landscape Other players can be split 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. Peer-to-Peer Services: 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 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. However, it could take a while for other players to establish themselves. In the meantime, more people may feel forced to buy cars, and many 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 delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the prospects of shared mobility in the UK.