🔗 Share this article What Exactly Has Gone Awry at Zipcar – Is the UK Car-Sharing Sector Dead? A volunteer food project in Rotherhithe has provided hundreds of prepared dishes each week for two years to elderly residents and vulnerable locals in south London. However, their operations 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 caused shock through the capital when it declared it would shut down its UK business from 1 January. This means many helpers will be unable to collect food from the Felix Project, that collects surplus food from supermarkets, cafes and restaurants. Other options are less convenient, costlier, or do not offer the same flexible hours. “It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the logistical challenge we will face. Many groups like ours will face difficulties.” “Faced with this 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, now potentially left without convenient access to vehicles, without the hassle and cost of ownership. The vast majority of those people were probably with Zipcar, which held a dominant position in the city. This shutdown, subject to consultation with employees, is a big blow to the vision that car sharing in urban areas could cut the need for owning a car. However, some analysts have noted that Zipcar’s exit need not spell the end for the concept in Britain. The Potential of Car Sharing Car sharing is prized by city planners and environmentalists as a way of mitigating the ills linked to vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for 95% of the time, occupying parking. They also involve large CO2 output to produce, and people without a vehicle tend to walk, cycle and take public transport more. That benefits cities – reducing congestion and pollution – and improves public health through more exercise. Understanding the Decline Zipcar was founded in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company's total earnings, and a loss that grew to £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, enhance profitability”. Its latest financial reports 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. London's Unique Hurdles Yet, several experts noted that London has specific problems that made it much harder for the sector to succeed. Patchwork Policies: With numerous local councils, car-club operators face a mosaic of different procedures and costs that complicate operations. Congestion Charge: The closure coincides with 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 floating car club would pay over £1,100 per year, creating a major disincentive. “We should literally be charged one-twentieth of a resident’s permit,” said Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.” Lessons from Abroad Nations in Europe offer models for London to follow. Germany enacted national car-sharing legislation in 2017, providing a unified system 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. “The evidence shows is that shared mobility around the world, especially in Europe, is growing,” said Bharath Devanathan of Invers. He suggested authorities should start to view vehicle clubs as a form of mass transit, 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 be split into two models: Fleet Operators: Which maintain their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility. Person-to-Person Rentals: Which allow users to rent 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 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. Yet, 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 without a convenient option. For Rotherhithe community kitchen, the next month will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the prospects of shared mobility in the UK.