🔗 Share this article What Exactly Has Gone So Awry at Zipcar – Is the UK Vehicle-Sharing Sector Finished? The community kitchen in Rotherhithe has been delivering a large number of prepared dishes each week for two years to elderly residents and needy locals in south London. However, the group's plans face major disruption by the news that they will lose cars and vans on New Year’s Day. This organization depended on Zipcar, the app-based vehicle rental service that allowed its cars via smartphone. It sent shockwaves across London when it declared it would cease its UK business from 1 January. It will mean many volunteers cannot pick up supplies from a major food charity, which gathers excess produce from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, more expensive, or do not offer the same convenient access. “It’s going to be affected massively,” said Vimal Pandya, the project's founder. “My team and I are worried about the operational hurdle we will face. A lot of people like ours will face difficulties.” “Knowing the reality, everyone is concerned and thinking: ‘How will we continue?’” A Major Blow for Urban Car-Sharing The community kitchen’s drivers are among over 500,000 people in London registered as car club members, who could be left without easy use to vehicles, avoiding the burden and cost of ownership. The vast majority of those members were likely with Zipcar, which held a dominant position in the city. This shutdown, pending consultation with staff, is a big blow to the vision that car sharing in cities could cut the need for owning a car. However, some experts have noted that Zipcar’s exit need not mean the demise for the concept in Britain. The Promise of Car Sharing Shared vehicle use is prized by many urbanists and environmentalists as a way of mitigating the problems linked to vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the side of the road for 95% of the time, occupying parking. They also involve large CO2 output to produce, and people without a vehicle tend to walk, cycle and take transit more. That benefits cities – easing congestion and pollution – and improves public health through increased activity. What Went Wrong? Zipcar was founded 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 total earnings, and a loss that grew to £11.7m in 2024 gave little incentive 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 simplify processes, improve returns”. Zipcar’s most recent accounts noted 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 Challenges However, industry observers noted that London has specific problems that made it much harder for the sector to succeed. Inconsistent Rules: Across 33 boroughs, car-club operators face a patchwork of varying processes and prices that made it harder. Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding unavoidable costs. Parking Permit Disparity: Residents in some boroughs pay as little as £63 for a annual 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 resident’s permit,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models in their place.” A European Example Nations in Europe 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 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, particularly on the continent, is growing,” commented 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 looking at entering the London market: “Operators will fill this gap.” What Comes Next? Other players can be split into two models: Fleet Operators: Which own or lease their own cars. Examples 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 – a kind of 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. Yet, it could take some time for other players to establish themselves. For now, more people may choose to buy cars, and others across London will be left without access. For Rotherhithe community kitchen, the next month will be a scramble to find a way. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of shared mobility in the UK.