🔗 Share this article What Exactly Has Gone So Wrong at Zipcar – Is the UK Vehicle-Sharing Sector Finished? A volunteer food project in Rotherhithe has distributed a large number of prepared dishes weekly for 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 lose access to New Year’s Day. The group depended on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles from the street. The company sent shockwaves across London when it said it would shut down its UK operations from 1 January. It will mean many helpers will be unable to collect food from the Felix Project, which gathers excess produce from grocery stores, cafes and restaurants. Other options are further away, costlier, or lack the same convenient access. “The impact will be massively,” said 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, they are all worried and thinking: ‘How are we going to carry on?” 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, now potentially left without easy use to vehicles, avoiding the burden and cost of ownership. The vast majority of those members were probably with Zipcar, which held a dominant position in the city. The planned closure, pending consultation with staff, is a serious setback to the vision that car sharing in cities could cut the need for private vehicle ownership. However, some experts have noted that Zipcar’s departure need not mean the demise for the concept in Britain. The Potential of Shared Mobility Shared vehicle use is valued by many urbanists and environmentalists as a way of reducing the problems linked to vehicle ownership. Typically, vehicles sit idle on the street for 95% of the time, occupying parking. They also involve large CO2 output to produce, and people who do not own cars tend to walk, cycle and take public transport more. That benefits cities – easing congestion and pollution – and improves people’s health through increased activity. What Went Wrong? Zipcar was founded in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK income were minimal compared with its parent company'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 “broader transformation across our global operations, where we are taking targeted actions to simplify processes, improve returns”. Zipcar’s most recent accounts noted revenues had declined as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the economic squeeze, which continues to suppress demand for non-essential services,” it said. London's Unique Challenges Yet, industry observers noted that London has specific problems that made it difficult for the company and its rivals to succeed. Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of different procedures and costs that complicate operations. New Costs: The closure comes as electric cars start paying London’s congestion charge, adding unavoidable costs. Parking Permit Disparity: Residents in some boroughs pay just £63 for a annual electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a significant barrier. “Our fees should be one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.” Lessons from Abroad Other European countries offer models for London to follow. Germany introduced national car-sharing legislation 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 lags behind at 0.7. “What we see is that car sharing around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers. Devanathan said authorities should start to treat car sharing as a form of public transport, and integrate 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.” The Future Landscape Other players can be split into two camps: Fleet Operators: Which own or lease their own cars. Examples 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 – similar to Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo. Turo, a US-headquartered peer-to-peer platform, is already weighing up the UK gap. Rory Brimmer, its UK head, 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. For now, more people may feel forced to buy cars, and others across London will be without a convenient option. For the volunteers in Rotherhithe, the next month will be a rush to find a way. The delivery problem caused by Zipcar’s exit highlights the wider implications of its departure on community groups and the future of car-sharing in the UK.