🔗 Share this article What Has Gone So Wrong at Zipcar – and the UK Car-Sharing Sector Dead? A community kitchen in Rotherhithe has been delivering hundreds of cooked meals weekly for the past two years to elderly residents and vulnerable 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. This organization depended on Zipcar, the car-sharing company that customers to access its fleet of vehicles via smartphone. The company caused shock through the capital when it declared it would shut down its UK business from 1 January. This means many helpers cannot pick up supplies from the Felix Project, that collects excess produce from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, more expensive, or lack the same flexible hours. “The impact will be massively,” stated Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the logistical challenge we will face. A lot of people like ours will face difficulties.” “Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?” A Significant Setback for Urban Car-Sharing These volunteers are among more than half a million people in London who were car club members, who could be left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those people were probably with Zipcar, which had a near-monopoly position in the city. This shutdown, pending consultation with employees, is a serious setback to the vision that vehicle clubs in cities could reduce the need for owning a car. Yet, some experts also suggested 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 environmentalists as a way of reducing the problems associated with vehicle ownership. Typically, vehicles sit idle on the street for 95% of the time, occupying parking. They also require large carbon emissions to produce, and people who do not own cars tend to use active travel and take public transport more. That helps urban areas – reducing congestion and pollution – and improves people’s health through more exercise. 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 barely registered compared with its owner's total earnings, and a deficit that reached £11.7m in 2024 gave little incentive to continue. The parent company stated the closure is part of a “broader transformation across our global operations, where we are taking targeted actions to streamline operations, enhance profitability”. Zipcar’s most recent accounts noted revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said. London's Unique Challenges However, industry observers noted that London has particular issues 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. Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs. 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 annually, creating a significant barrier. “We should literally be charged one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models 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 unified system for parking, subsidies and exemptions. 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. “The evidence shows 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: “There will be fill this gap.” What Comes Next? Other players can roughly be divided into two camps: Fleet Operators: 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 – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo. One company, 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 a while 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 Rotherhithe community kitchen, the next month will be a rush to find a way. 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.