🔗 Share this article What Has Gone Wrong at Zipcar – Is the UK Car-Sharing Market Dead? A volunteer food project in Rotherhithe has provided hundreds of cooked meals each week for the past two years to elderly residents and needy locals in south London. However, their operations face major disruption by the announcement that they will not have use of New Year’s Day. The group had relied on Zipcar, the car-sharing company that customers to access its cars via smartphone. It caused shock through the capital when it said it would shut down its UK business from 1 January. This means many helpers cannot pick up supplies from the Felix Project, that collects excess produce from supermarkets, cafes and restaurants. Other options are further away, more expensive, or lack the same convenient access. “It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I 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 are we going to carry on?” A Major Blow for City Vehicle Clubs These volunteers are among over 500,000 people in London registered as car club members, now potentially left without easy use to vehicles, without the hassle and cost of ownership. Most of those members were probably with Zipcar, which held a dominant position in the city. This shutdown, pending consultation with staff, is a serious setback to hopes that vehicle clubs in cities could cut the need for owning a car. Yet, some experts have noted that Zipcar’s departure need not spell the end for the concept in Britain. The Potential of Car Sharing Car sharing is prized by city planners and green advocates as a way of reducing the ills linked to vehicle ownership. Typically, vehicles sit idle on the side of the road for 95% of the time, using up space. They also involve large CO2 output to produce, and people without a vehicle tend to walk, cycle and take transit more. That benefits cities – reducing congestion and pollution – and improves people’s health through increased activity. What Went Wrong? 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 parent company's overall annual revenue, and a deficit that reached £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 targeted actions to simplify processes, improve returns”. Its latest financial reports said revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which continues to suppress demand for discretionary spending,” it said. The Capital's Specific Hurdles Yet, 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 mosaic of varying processes and prices that complicate operations. New Costs: 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 annual 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 private parking cost,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models in their place.” Lessons from Abroad Nations in Europe offer models for London to follow. Germany introduced national car-sharing legislation in 2017, providing a unified system for parking, subsidies and exemptions. Now, the country has several shared cars per 10,000 people, while France has 2.1 and Belgium has 6.3. The UK trails at 0.7. “The evidence shows is that shared mobility around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers. Devanathan said authorities should start to treat car sharing as a form of mass transit, and link it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “There will be fill this gap.” The Future Landscape The company’s competitors can roughly be divided into two camps: Company-Owned Fleets: 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 – a kind of Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo. Turo, a US-headquartered P2P service, is already weighing up the UK gap. Rory Brimmer, its UK managing director, 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. Yet, it could take a while for other players to build momentum. For now, more people may choose to buy cars, and many across London will be without a convenient option. For the volunteers in Rotherhithe, the next month will be a rush to find a way. The delivery problem caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the future of shared mobility in the UK.