🔗 Share this article What Has Gone So Awry at Zipcar – and the UK Car-Sharing Sector Dead? A volunteer food project in Rotherhithe has been delivering hundreds of cooked meals each week for the past two years to pensioners and needy locals in southeast London. Yet, the group's plans have been thrown into disarray by the announcement that they will lose cars and vans on New Year’s Day. This organization depended on Zipcar, the car-sharing company that allowed its cars from the street. The company sent shockwaves across London when it said it would cease its UK operations from 1 January. It will mean many volunteers cannot pick up supplies from the Felix Project, that collects surplus food from supermarkets, cafes and restaurants. Obvious alternatives are further away, costlier, or do not offer the same flexible hours. “It’s going to be affected massively,” stated 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 are we going to carry on?” A Significant Setback for Urban Car-Sharing 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, without the hassle and cost of ownership. Most 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 urban areas could cut the need for owning a car. However, some experts have noted that Zipcar’s exit need not spell the end for the idea in Britain. The Potential of Shared Mobility Shared vehicle use is valued by city planners and green advocates as a way of reducing the problems linked to vehicle ownership. Most cars sit idle on the side of the road for the vast majority of the time, occupying parking. They also involve large carbon emissions 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 more exercise. Understanding the Decline Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK income were minimal compared with its parent company's total earnings, and a deficit that reached £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 targeted actions to streamline operations, improve returns”. Its latest financial reports said revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for discretionary spending,” it said. The Capital's Specific Challenges However, several experts noted that London has particular issues that made it much harder for the company and its rivals to succeed. Inconsistent Rules: With numerous local councils, car-club operators face a mosaic 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. Unequal Parking Fees: Locals in some boroughs pay just £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,” 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 car-sharing legislation in 2017, providing a unified system for parking, subsidies 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 shared mobility around the world, particularly on the continent, is growing,” commented Bharath Devanathan of Invers. He suggested authorities should start to view vehicle clubs 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. Peer-to-Peer Services: Which allow users to hire out their own vehicles via an app – similar to Airbnb for cars. Players include 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 managing director, said there was a “significant chance” to win more users. “There is a void 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. In the meantime, more people may choose to buy cars, and many across London will be without a convenient option. 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.