🔗 Share this article What Has Gone Awry at Zipcar – Is the UK Car-Sharing Market Finished? A volunteer food project in Rotherhithe has distributed hundreds of cooked meals each week for two years to pensioners and vulnerable locals in southeast London. However, the group's plans face major disruption by the news that they will lose access to New Year’s Day. This organization depended on Zipcar, the car-sharing company that allowed its cars via smartphone. It sent shockwaves through the capital when it declared it would cease its UK business from 1 January. This means many helpers cannot collect food from a major food charity, that collects surplus food from supermarkets, cafes and restaurants. Other options are less convenient, costlier, or lack the same convenient access. “The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are worried about the operational hurdle we will face. Many groups like ours will face difficulties.” “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 more than half a million people in London registered as car club members, who could be left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those people were likely with Zipcar, which had a near-monopoly position in the city. This shutdown, subject to consultation with employees, is a serious setback to hopes that car sharing 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 concept in Britain. The Potential of Shared Mobility Car sharing is prized by city planners and environmentalists as a way of mitigating the problems linked to vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the street for 95% 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 public transport more. That helps urban areas – reducing congestion and pollution – and improves people’s 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 were minimal compared with its parent company's total earnings, and a loss that grew to £11.7m in 2024 gave no reason to continue. Avis Budget has said the closure is part of a “broader transformation across our international business, where we are taking deliberate steps to simplify processes, enhance profitability”. Zipcar’s most recent accounts noted revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the economic squeeze, which is dampening demand for discretionary spending,” it said. London's Unique Hurdles Yet, several experts noted that London has specific problems that made it much harder for the company and its rivals to succeed. Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of varying processes and costs that made it harder. New Costs: 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 floating car club would pay over £1,100 annually, creating a significant barrier. “We should literally be charged one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.” A European Example Nations in Europe offer models for London to follow. Germany introduced national shared mobility laws in 2017, providing a unified system for parking, support 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, particularly on the continent, is expanding,” said 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 one unnamed client was looking at entering the London market: “Operators will fill this gap.” The Future Landscape Other players can be split into two camps: Company-Owned Fleets: Which maintain 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 – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo. One company, a US-headquartered P2P service, 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 a while for other players to build momentum. For now, more people may choose to buy cars, and others across London will be without a convenient option. For the volunteers in Rotherhithe, the next month will be a scramble to find a way. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on community groups and the future of shared mobility in the UK.