🔗 Share this article What Exactly Has Gone Wrong at Zipcar – and the UK Vehicle-Sharing Sector Finished? A community kitchen in Rotherhithe has distributed a large number of prepared dishes weekly for two years to elderly residents and vulnerable locals in south London. Yet, the group's plans have been thrown into disarray by the announcement that they will not have access to New Year’s Day. This organization depended on Zipcar, the app-based vehicle rental service that customers to access its cars from the street. It sent shockwaves across London when it said it would shut down its UK operations from 1 January. This means many helpers will be unable to collect food from a major food charity, that collects excess produce from grocery stores, cafes and restaurants. Other options are less convenient, more expensive, or lack the same convenient access. “The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the operational hurdle we will face. Many groups like ours are going to struggle.” “Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?” 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, who could be left without convenient access to vehicles, without the hassle 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 hopes that car sharing in cities could cut the need for private vehicle ownership. Yet, some analysts also suggested that Zipcar’s departure need not mean the demise for the idea in Britain. The Promise of Shared Mobility Car sharing is prized by city planners and environmentalists as a way of reducing the ills linked to vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the street for the vast majority of the time, occupying parking. They also require large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take public transport more. That helps urban areas – easing congestion and pollution – and boosts public 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 were minimal compared with its owner's overall annual revenue, and a deficit 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 international business, where we are taking deliberate steps to simplify processes, improve returns”. Zipcar’s most recent accounts noted revenues had declined as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said. London's Unique Challenges Yet, several experts noted that London has specific problems that made it difficult for the sector to succeed. Patchwork Policies: Across 33 boroughs, car-club operators face a patchwork of different procedures and prices that made it harder. 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 annual electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a significant barrier. “We should literally be charged one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.” A European Example 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, particularly on the continent, is expanding,” said 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 one unnamed client was already seriously considering entering the London market: “There will be fill this gap.” The Future Landscape The company’s competitors can be split into two models: 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 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 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. Yet, 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 left without access. For Rotherhithe community kitchen, the coming weeks will be a scramble to find a solution. The logistical challenge caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the future of car-sharing in the UK.