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

The volunteer food project in Rotherhithe has been delivering a large number of cooked meals weekly for two years to pensioners and vulnerable locals in southeast London. However, the group's plans face major disruption by the news that they will not have cars and vans on New Year’s Day.

The group depended on Zipcar, the car-sharing company that allowed its cars via smartphone. It caused shock through the capital when it declared it would cease its UK operations from 1 January.

It will mean many helpers will be unable to pick up supplies from a major food charity, which gathers surplus food from grocery stores, cafes and restaurants. Other options are further away, costlier, or do not offer the same convenient access.

“The impact will be massively,” stated Vimal Pandya, the project's founder. “Personally me and my team are worried about the logistical challenge we will face. A lot of people 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 over 500,000 people in London who were car club members, now potentially left without easy use to vehicles, avoiding the burden and cost of ownership. The vast majority of those members were probably with Zipcar, which had a near-monopoly position in the city.

This shutdown, pending consultation with staff, is a serious setback to hopes that vehicle clubs in cities could reduce the need for owning a car. However, some analysts also suggested that Zipcar’s departure need not mean the demise for the concept in Britain.

The Promise of Shared Mobility

Car sharing is prized by many urbanists and environmentalists as a way of reducing the ills linked to vehicle ownership. Most cars sit idle on the side of the road 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 – reducing congestion and pollution – and improves public health through more exercise.

What Went Wrong?

Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's total earnings, 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 global operations, where we are taking targeted actions to streamline operations, enhance profitability”.

Zipcar’s most recent accounts noted revenues had declined as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which is dampening demand for non-essential services,” it said.

The Capital's Specific Challenges

Yet, several experts noted that London has particular issues that made it much harder for the sector to succeed.

• Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of different procedures and costs that complicate operations.
• New Costs: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
• 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 annually, creating a significant barrier.

“Our fees should be one-twentieth of a private parking cost,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars 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 nationwide framework for parking, subsidies 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 shared mobility around the world, particularly on the continent, is expanding,” said Bharath Devanathan of Invers.

He suggested authorities should start to view vehicle clubs 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: “Operators will fill this gap.”

The Future Landscape

Other players can roughly be divided into two models:

1. Company-Owned Fleets: Which own or lease 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 – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.

Turo, a US-headquartered peer-to-peer platform, is assessing the UK gap. Rory Brimmer, its UK head, said there was a “big opportunity” 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 many across London will be without a convenient option.

For Rotherhithe community kitchen, the next month 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 prospects of shared mobility in the UK.