🔗 Share this article What Has Gone So Awry at Zipcar – Is the UK Vehicle-Sharing Sector Dead? The community kitchen in Rotherhithe has been delivering hundreds of prepared dishes each week for the past two years to pensioners and vulnerable 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. The group had relied on Zipcar, the car-sharing company that allowed its fleet of vehicles via smartphone. It sent shockwaves across London when it said it would shut down its UK business from 1 January. This means many volunteers will be unable to collect food from a major food charity, that collects excess produce from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, costlier, or lack the same convenient access. “It’s going to be affected massively,” stated Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the logistical challenge we will face. Many groups like ours are going to struggle.” “Faced with this reality, they are all worried and thinking: ‘How will we continue?’” A Significant Setback for Urban Car-Sharing These volunteers are part of more than half a million people in London registered as car club members, now potentially left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those members were probably with Zipcar, which held a dominant position in the city. The planned closure, pending consultation with staff, is a big blow to hopes that car sharing in cities could reduce the need for private vehicle ownership. However, some analysts have noted that Zipcar’s departure need not mean the demise for the concept in Britain. The Potential of Shared Mobility Shared vehicle use is prized by city planners and green advocates as a way of reducing the ills associated with vehicle ownership. Most cars sit idle on the side of the road for 95% of the time, using up space. They also require large CO2 output to produce, and people without a vehicle tend to use active travel and take public transport more. That helps urban areas – reducing congestion and pollution – and improves people’s health through increased activity. 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 owner's total earnings, and a loss that reached £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 said revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said. London's Unique Challenges However, industry observers noted that London has specific problems that made it difficult for the company and its rivals to succeed. Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of different procedures and costs that made it harder. Congestion Charge: 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 year’s electric car parking permit. A similar shared vehicle 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.” Lessons from Abroad Nations in Europe offer models for London to follow. Germany introduced national shared mobility laws in 2017, providing a nationwide framework 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. “The evidence shows is that car sharing around the world, especially in Europe, is expanding,” said Bharath Devanathan of Invers. Devanathan said authorities should start to treat car sharing as a form of public transport, 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.” What Comes Next? The company’s competitors can be split into two camps: Fleet Operators: Which maintain their own cars. Examples 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 – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo. Turo, 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. For now, more people may feel forced to buy cars, and others across London will be left without access. For Rotherhithe community kitchen, the coming weeks will be a rush to find a way. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the prospects of car-sharing in the UK.