🔗 Share this article What Exactly Has Gone Wrong at Zipcar – and the UK Vehicle-Sharing Market Dead? The volunteer food project in Rotherhithe has provided hundreds of cooked meals weekly for two years to elderly residents and needy locals in south London. However, the group's plans have been thrown into disarray by the announcement that they will lose access to New Year’s Day. The group depended on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles via smartphone. The company sent shockwaves through the capital when it said it would cease its UK operations from 1 January. It will mean many helpers will be unable to collect food 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. “The impact will be massively,” stated Vimal Pandya, the community kitchen’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.” “Faced with this reality, everyone is concerned and thinking: ‘How will we continue?’” A Significant Setback for City Vehicle Clubs These volunteers are part of more than half a million people in London who were car club members, now potentially left without convenient access 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 employees, is a big blow to the vision that vehicle clubs in cities could cut the need for private vehicle ownership. Yet, some analysts have noted that Zipcar’s exit need not spell the end for the idea in Britain. The Promise of Shared Mobility Car sharing is valued by city planners and green advocates as a way of reducing the problems associated with vehicle ownership. Typically, vehicles sit idle on the street for the vast majority of the time, using up space. They also require large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take public transport more. That benefits cities – easing congestion and pollution – and boosts public health through increased activity. Understanding the Decline The company started in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's overall annual revenue, and a loss that reached £11.7m in 2024 gave no reason to continue. The parent company stated the closure is part of a “broader transformation across our global operations, where we are taking deliberate steps to simplify processes, enhance profitability”. Zipcar’s most recent accounts said revenues had fallen as drivers took fewer and shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which continues to suppress demand for non-essential services,” it said. The Capital's Specific Hurdles However, several experts noted that London has particular issues that made it much harder for the company and its rivals to succeed. Inconsistent Rules: Across 33 boroughs, car-club operators face a patchwork of varying processes and prices that complicate operations. Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding extra expenses. Parking Permit Disparity: Locals in some boroughs pay just £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 per year, creating a significant barrier. “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’re putting less polluting cars in their place.” Lessons from Abroad Nations in Europe offer models for London to follow. Germany introduced national car-sharing legislation in 2017, providing a nationwide framework for parking, support 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. “What we see is that car sharing around the world, particularly on the continent, is growing,” said Bharath Devanathan of Invers. He suggested authorities should start to treat car sharing as a form of public transport, and link 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.” The Future Landscape The company’s competitors can be split into two models: Company-Owned Fleets: 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 – 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 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. 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 without a convenient option. For the volunteers in Rotherhithe, the coming weeks will be a rush to find a way. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the future of car-sharing in the UK.