What Exactly Has Gone So Wrong at Zipcar – and the UK Vehicle-Sharing Sector Dead?
The volunteer food project in Rotherhithe has been delivering hundreds of prepared dishes weekly 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 use of New Year’s Day.
This organization depended on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles from the street. The company sent shockwaves through the capital when it said it would shut down its UK operations from 1 January.
This means many volunteers will be unable to 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.
“It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the operational hurdle we will face. A lot of people like ours are going to struggle.”
“Faced with this 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, who could be left without convenient access to vehicles, without the hassle and cost of ownership. The vast majority of those people were probably with Zipcar, which had a near-monopoly position in the city.
The planned closure, subject to consultation with employees, is a big blow to hopes that vehicle clubs in urban areas could reduce the need for private vehicle ownership. However, some experts have noted that Zipcar’s departure need not spell the end for the concept in Britain.
The Potential of Shared Mobility
Car sharing is prized by many urbanists and green advocates as a way of mitigating the ills linked to vehicle ownership. Most cars sit idle on the street for the vast majority 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 benefits cities – 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 US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered 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 “broader transformation across our global operations, where we are taking deliberate steps to simplify processes, enhance profitability”.
Zipcar’s most recent accounts said revenues had fallen as drivers took fewer and shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which continues to suppress 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.
- Patchwork Policies: Across 33 boroughs, car-club operators face a patchwork of varying processes and costs that complicate operations.
- Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding extra expenses.
- Parking Permit Disparity: Locals 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,” said 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 enacted national shared mobility laws in 2017, providing a unified system 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 trails at 0.7.
“What we see 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 mass transit, and integrate 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 models:
- Company-Owned Fleets: 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 – a kind of Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.
Turo, a US-headquartered peer-to-peer platform, is assessing the UK gap. Rory Brimmer, its UK managing director, 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 choose to buy cars, and others across London will be without a convenient option.
For Rotherhithe community kitchen, the next month will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the prospects of car-sharing in the UK.
