🔗 Share this article What Has Gone So Awry at Zipcar – and the UK Vehicle-Sharing Market Dead? A volunteer food project in Rotherhithe has been delivering a large number of cooked meals weekly for the past two years to elderly residents and needy locals in southeast London. However, their operations have been thrown into disarray by the announcement that they will lose cars and vans on New Year’s Day. This organization depended on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles from the street. The company caused shock across London when it declared it would shut down its UK operations from 1 January. This means many volunteers will be unable to pick up supplies from a major food charity, which gathers 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,” stated Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by the logistical challenge we will face. A lot of people like ours are going to struggle.” “Faced with this reality, everyone is concerned and thinking: ‘How are we going to carry on?” A Major Blow for City Vehicle Clubs The community kitchen’s drivers are part of more than half a million people in London registered as car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. Most of those members were likely with Zipcar, which had a near-monopoly position in the city. The planned closure, subject to consultation with employees, is a serious setback to the vision that vehicle clubs in urban areas could cut the need for private vehicle ownership. Yet, some analysts have noted that Zipcar’s departure need not spell the end for the idea in Britain. The Promise of Shared Mobility Shared vehicle use is prized by city planners and environmentalists as a way of reducing the ills associated with vehicle ownership. Most cars sit idle on the side of the road for the vast majority of the time, using up space. They also require large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take transit more. That helps urban areas – easing congestion and pollution – and improves public health through more exercise. What Went Wrong? Zipcar was founded in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its parent company's overall annual revenue, and a deficit 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 cost-of-living crisis, which is dampening demand for non-essential services,” 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. Patchwork Policies: With numerous local councils, car-club operators face a patchwork of different procedures and costs that complicate operations. New Costs: The closure comes as electric cars start paying London’s congestion charge, adding extra expenses. Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a annual electric car parking permit. A floating car club would pay over £1,100 per year, creating a major disincentive. “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 introduce cleaner models in their place.” Lessons from Abroad Other European countries offer examples for London to follow. Germany enacted national car-sharing legislation in 2017, providing a nationwide framework for parking, subsidies 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 trails at 0.7. “What we see is that car sharing 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 public transport, and integrate 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.” What Comes Next? The company’s competitors can roughly be divided into two camps: Company-Owned Fleets: Which maintain their own cars. Examples 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. Turo, a US-headquartered peer-to-peer platform, is already weighing up 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 some time for other players to build momentum. In the meantime, more people may feel forced to buy cars, and others across London will be without a convenient option. For Rotherhithe community kitchen, the coming weeks will be a rush to find a way. The logistical challenge caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the future of shared mobility in the UK.