🔗 Share this article What Has Gone Wrong at Zipcar – and the UK Vehicle-Sharing Market Finished? A volunteer food project in Rotherhithe has distributed a large number of cooked meals weekly for two years to elderly residents and needy locals in south London. However, the group's plans have been thrown into disarray by the announcement that they will not have use of New Year’s Day. This organization had relied on Zipcar, the car-sharing company that allowed its cars from the street. The company caused shock across London when it declared it would shut down its UK business from 1 January. It will mean many helpers will be unable to pick up supplies from the Felix Project, which gathers surplus food from supermarkets, cafes and restaurants. Other options are less convenient, more expensive, or lack the same flexible hours. “It’s going to be affected massively,” said Vimal Pandya, the project's founder. “Personally me and my team are worried about the operational hurdle 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 City Vehicle Clubs The community kitchen’s drivers are part of over 500,000 people in London registered as 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 the vision that vehicle clubs in cities could cut the need for private vehicle ownership. Yet, some analysts also suggested that Zipcar’s departure need not mean the demise for the idea in Britain. The Potential of Shared Mobility Shared vehicle use is valued by many urbanists and environmentalists as a way of mitigating the problems associated with 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 carbon emissions to produce, and people without a vehicle tend to use active travel and take public transport more. That helps urban areas – easing congestion and pollution – and improves people’s health through increased activity. Understanding the Decline Zipcar was founded in 2000 before its acquisition 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 no reason to continue. The parent company stated the closure is part of a “wider restructuring across our international business, where we are taking deliberate steps to streamline operations, improve returns”. Zipcar’s most recent accounts noted revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said. The Capital's Specific Challenges However, industry observers 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 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: Residents in some boroughs pay just £63 for a annual electric car parking permit. A floating car club would pay over £1,100 per year, creating a significant barrier. “Our fees should be one-twentieth of a private parking cost,” 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 models for London to follow. Germany introduced national car-sharing legislation in 2017, providing a unified system 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 shared mobility around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers. Devanathan said authorities should start to view vehicle clubs as a form of public transport, 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.” What Comes Next? The company’s competitors 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. Person-to-Person Rentals: Which allow users to rent out their own vehicles via an app – similar to Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo. One company, 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 a while for other players to establish themselves. For now, more people may choose to buy cars, and many across London will be left without access. For Rotherhithe community kitchen, the coming weeks will be a rush to find a way. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of car-sharing in the UK.