What Exactly Has Gone So Awry at Zipcar – Is the UK Vehicle-Sharing Sector Finished?
The volunteer food project in Rotherhithe has distributed a large number of cooked meals weekly for the past two years to pensioners and vulnerable locals in southeast London. However, the group's plans have been thrown into disarray by the news that they will lose access to New Year’s Day.
The group had relied on Zipcar, the app-based vehicle rental service that customers to access its cars from the street. The company sent shockwaves through the capital when it declared it would cease its UK operations from 1 January.
This means many helpers will be unable to pick up supplies from the Felix Project, which gathers surplus food from supermarkets, cafes and restaurants. Obvious alternatives are further away, more expensive, or lack the same convenient access.
“The impact will be massively,” stated Vimal Pandya, the project's founder. “Personally me and my team are worried about the operational hurdle we will face. A lot of people like ours are going to struggle.”
“Knowing the reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Major Blow for Urban Car-Sharing
These volunteers are part of over 500,000 people in London who were car club members, who could be left without easy use 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, subject to consultation with staff, is a big blow to the vision that vehicle clubs in urban areas could cut the need for owning a car. However, some experts have noted that Zipcar’s exit need not mean the demise for the concept in Britain.
The Promise of Shared Mobility
Car sharing is valued by many urbanists and environmentalists as a way of mitigating the problems linked to vehicle ownership. Typically, vehicles 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 walk, cycle and take transit more. That benefits cities – reducing congestion and pollution – and boosts people’s health through increased activity.
What Went Wrong?
Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its owner's total earnings, and a loss that reached £11.7m in 2024 gave no reason to continue.
Avis Budget has said the closure is part of a “wider restructuring across our international business, where we are taking deliberate steps to streamline operations, enhance profitability”.
Zipcar’s most recent accounts noted revenues had declined 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 specific problems that made it much harder for the sector to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of varying processes 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: Residents in some boroughs pay as little as £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 per year, creating a major disincentive.
“Our fees should be one-twentieth of a private parking cost,” argued Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”
Lessons from Abroad
Nations in Europe offer examples for London to follow. Germany enacted national shared mobility laws in 2017, providing a unified system 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 trails at 0.7.
“What we see is that shared mobility around the world, especially in Europe, is expanding,” commented Bharath Devanathan of Invers.
He suggested authorities should start to view vehicle clubs as a form of public transport, and link it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “Operators will fill this gap.”
What Comes Next?
The company’s competitors can be split into two camps:
- Fleet Operators: Which maintain their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Peer-to-Peer Services: 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.
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.
However, it could take some time for other players to establish themselves. In the meantime, more people may feel forced to buy cars, and others across London will be left without access.
For the volunteers in Rotherhithe, the next month will be a rush to find a solution. The delivery problem caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the future of car-sharing in the UK.