🔗 Share this article What Has Gone So Wrong at Zipcar – Is the UK Vehicle-Sharing Market Dead? A community kitchen in Rotherhithe has been delivering hundreds of prepared dishes each week for the past two years to elderly residents and needy locals in south London. However, their operations face major disruption by the news that they will not have use of New Year’s Day. The group had relied on Zipcar, the app-based vehicle rental service that allowed its cars via smartphone. The company caused shock across London when it said it would shut down its UK business from 1 January. It will mean many volunteers will be unable to collect food from a major food charity, that collects excess produce from grocery stores, cafes and restaurants. Other options are less convenient, costlier, or do not offer the same convenient access. “The impact will be massively,” stated Vimal Pandya, the community kitchen’s founder. “Personally me and my team are worried about the logistical challenge we will face. A lot of people like ours are going to struggle.” “Knowing the reality, they are all worried and thinking: ‘How will we continue?’” A Significant Setback for City Vehicle Clubs The community kitchen’s drivers are among 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. 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 the vision that vehicle clubs in cities could cut the need for private vehicle ownership. Yet, some experts also suggested that Zipcar’s departure need not spell the end for the idea in Britain. The Potential of Shared Mobility Car sharing is valued by city planners and environmentalists as a way of mitigating the ills associated with vehicle ownership. Most cars sit idle on the side of the road 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 walk, cycle and take transit more. That helps urban areas – easing congestion and pollution – and boosts people’s health through increased activity. Understanding the Decline The company started in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's total earnings, and a loss that reached £11.7m in 2024 gave little incentive to continue. Avis Budget has said the closure is part of a “wider restructuring across our global operations, where we are taking targeted actions to simplify processes, enhance profitability”. Its latest financial reports noted 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 Challenges However, several experts noted that London has particular issues that made it difficult for the sector to succeed. Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of varying processes and costs that complicate operations. New Costs: The closure coincides with electric cars start paying 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 per year, creating a significant barrier. “We should literally be charged one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.” Lessons from Abroad Other European countries offer models for London to follow. Germany introduced national shared mobility laws in 2017, providing a unified system for parking, subsidies and waivers. 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. “The evidence shows is that car sharing around the world, particularly on the continent, is expanding,” commented 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 one unnamed client was looking at entering the London market: “There will be fill this gap.” What Comes Next? Other players can be split into two camps: Fleet Operators: Which maintain 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 – similar to Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo. One company, a US-headquartered peer-to-peer platform, 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 many across London will be left without access. For Rotherhithe community kitchen, the next month will be a scramble to find a way. The logistical challenge caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the prospects of shared mobility in the UK.