🔗 Share this article What Has Gone Awry at Zipcar – and the UK Car-Sharing Sector Dead? The community kitchen in Rotherhithe has been delivering a large number of prepared dishes weekly for the past two years to pensioners and needy locals in south London. Yet, the group's plans have been thrown into disarray by the news that they will not have use of New Year’s Day. This organization depended 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 cease its UK operations from 1 January. It will mean many volunteers cannot pick up supplies from the Felix Project, that collects excess produce from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, costlier, or do not offer the same convenient access. “It’s going to be affected massively,” stated Vimal Pandya, the project's founder. “Personally me and my team are concerned by the logistical challenge we will face. Many groups like ours will face difficulties.” “Faced with this reality, everyone is concerned and thinking: ‘How will we continue?’” A Major Blow for City Vehicle Clubs These volunteers are among over 500,000 people in London who were car club members, now potentially left without easy use to vehicles, avoiding the burden and cost of ownership. Most of those members were probably with Zipcar, which held a dominant position in the city. This shutdown, subject to consultation with employees, is a big blow to the vision that vehicle clubs in cities could reduce the need for owning a car. However, some analysts have noted that Zipcar’s departure need not mean the demise for the concept in Britain. The Potential of Car Sharing Shared vehicle use is prized by many urbanists and green advocates as a way of mitigating the problems associated with vehicle ownership. Most cars sit as two-tonne dead weights 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 use active travel and take public transport more. That benefits cities – reducing congestion and pollution – and improves public 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 income were minimal compared with its owner's overall annual revenue, 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 simplify processes, enhance profitability”. Its latest financial reports noted revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the ongoing impact 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 difficult for the sector to succeed. Patchwork Policies: Across 33 boroughs, car-club operators face a patchwork of different procedures and costs that complicate operations. New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding extra expenses. Unequal Parking Fees: Locals in some boroughs pay just £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 annually, creating a significant barrier. “Our fees should be one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.” A European Example Nations in Europe offer examples for London to follow. Germany introduced national shared mobility laws in 2017, providing a nationwide framework for parking, support and exemptions. 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, especially in Europe, is expanding,” said Bharath Devanathan of Invers. He suggested authorities should start to view vehicle clubs as a form of mass transit, and link 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? Other players can roughly be divided into two camps: Fleet Operators: Which own or lease 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 – 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 managing director, said there was a “big opportunity” 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 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 solution. The delivery problem caused by Zipcar’s exit underscores the wider implications of its departure on community groups and the future of car-sharing in the UK.