What Has Gone Wrong at Zipcar – and the UK Vehicle-Sharing Sector Dead?

The volunteer food project in Rotherhithe has been delivering a large number of prepared dishes each week for two years to elderly residents 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 app-based vehicle rental service that allowed its fleet of vehicles from the street. It caused shock across London when it said it would cease its UK business from 1 January.

This means many volunteers will be unable to collect food from the Felix Project, which gathers excess produce from supermarkets, cafes and restaurants. Obvious alternatives are further away, more expensive, or do not offer the same flexible hours.

“The impact will be massively,” said Vimal Pandya, the project's founder. “My team and I are worried about the operational hurdle we will face. Many groups like ours will face difficulties.”

“Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?”

A Major Blow for City Vehicle Clubs

The community kitchen’s drivers are among over 500,000 people in London registered as car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those members were likely with Zipcar, which had a near-monopoly position in the city.

This shutdown, pending consultation with employees, is a big blow to hopes that vehicle clubs in urban areas could cut the need for owning a car. However, some experts also suggested that Zipcar’s departure need not mean the demise for the idea in Britain.

The Potential of Car Sharing

Car sharing is valued by many urbanists and environmentalists as a way of mitigating the ills associated with vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the street for the vast majority of the time, occupying parking. They also require large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take transit more. That helps urban areas – easing congestion and pollution – and boosts people’s health through increased activity.

What Went Wrong?

Zipcar was founded in 2000 before being bought 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 deficit 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 global operations, where we are taking targeted actions to streamline operations, enhance profitability”.

Its latest financial reports said revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said.

London's Unique Challenges

Yet, several experts noted that London has specific problems that made it much harder for the company and its rivals to succeed.

• Patchwork Policies: With numerous local councils, car-club operators face a patchwork of different procedures and costs that made it harder.
• New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
• Unequal Parking Fees: Residents in some boroughs pay as little as £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 annually, creating a significant barrier.

“We should literally be charged one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”

A European Example

Nations in Europe offer models for London to follow. Germany introduced 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 lags behind at 0.7.

“The evidence shows is that car sharing around the world, particularly on the continent, is growing,” said Bharath Devanathan of Invers.

Devanathan said authorities should start to treat car sharing as a form of mass transit, and integrate it with train and bus stations. He added that a potential operator was looking at entering the London market: “There will be fill this gap.”

The Future Landscape

Other players can be split into two models:

1. Company-Owned Fleets: Which own or lease their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. Peer-to-Peer Services: Which allow users to hire out their own vehicles via an app – a kind of Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.

Turo, 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 some time for other players to establish themselves. In the meantime, more people may feel forced to buy cars, and many 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 underscores the wider implications of its departure on community groups and the prospects of shared mobility in the UK.