🔗 Share this article What Exactly Has Gone Awry at Zipcar – Is the UK Vehicle-Sharing Sector Dead? A community kitchen in Rotherhithe has provided hundreds of cooked meals weekly for the past two years to elderly residents and needy locals in southeast London. However, their operations have been thrown into disarray 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 customers to access its fleet of vehicles via smartphone. It caused shock through the capital when it declared it would cease its UK operations from 1 January. It will mean many volunteers cannot collect food from a major food charity, that collects excess produce from grocery stores, cafes and restaurants. Obvious alternatives are further away, costlier, or do not offer the same flexible hours. “The impact will be massively,” stated Vimal Pandya, the project's founder. “My team and I are worried about the operational hurdle we will face. Many groups like ours are going to struggle.” “Knowing the reality, they are all worried and thinking: ‘How will we continue?’” A Major Blow for Urban Car-Sharing The community kitchen’s drivers are part of 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, pending consultation with staff, is a serious setback to the vision that vehicle clubs in urban areas could reduce the need for private vehicle ownership. However, some experts have noted that Zipcar’s exit need not spell the end for the idea in Britain. The Promise of Shared Mobility Shared vehicle use is valued by city planners and environmentalists as a way of mitigating the ills associated with vehicle ownership. Most cars sit idle on the street for 95% of the time, using up space. They also involve large carbon emissions to produce, and people who do not own cars tend to use active travel and take transit more. That benefits cities – reducing congestion and pollution – and improves people’s health through increased activity. What Went Wrong? 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 owner's overall annual revenue, and a deficit 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 international business, where we are taking targeted actions to streamline operations, enhance profitability”. Zipcar’s most recent accounts noted revenues had declined as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which is dampening demand for discretionary spending,” it said. London's Unique Challenges Yet, industry observers 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 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. Parking Permit Disparity: 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 annually, creating a major disincentive. “Our fees should be one-twentieth of a resident’s permit,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models in their place.” A European Example Other European countries offer examples for London to follow. Germany introduced national shared mobility laws in 2017, providing a nationwide framework for parking, support 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 lags behind 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 link it with train and bus stations. He added that one unnamed client was looking at entering the London market: “Operators will fill this gap.” What Comes Next? Other players can roughly be divided into two camps: 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 – a kind of Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo. One company, a US-headquartered P2P service, is assessing the UK gap. Rory Brimmer, its UK managing director, said there was a “significant chance” 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 a while for other players to build momentum. For now, more people may choose to buy cars, and many across London will be left without access. For Rotherhithe community kitchen, the coming weeks will be a rush to find a solution. 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.