🔗 Share this article What Exactly Has Gone Awry at Zipcar – and the UK Car-Sharing Market Dead? A volunteer food project in Rotherhithe has provided hundreds of prepared dishes each week for the past two years to elderly residents and vulnerable locals in southeast London. However, their operations face major disruption by the announcement that they will not have access to New Year’s Day. This organization had relied on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles via smartphone. It sent shockwaves through the capital when it declared it would cease its UK operations from 1 January. This means many volunteers cannot pick up supplies from the Felix Project, which gathers excess produce from supermarkets, cafes and restaurants. Other options are less convenient, more expensive, or do not offer the same flexible hours. “The impact will be massively,” stated Vimal Pandya, the project'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 Major Blow for Urban Car-Sharing These volunteers are part of more than half a million people in London registered as car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those people were probably with Zipcar, which held a dominant position in the city. The planned closure, subject to consultation with staff, is a big blow to the vision that car sharing in cities could cut the need for owning a car. However, some experts have noted that Zipcar’s departure need not spell the end for the concept in Britain. The Promise of Car Sharing Car sharing is valued by many urbanists and green advocates as a way of mitigating the ills linked to vehicle ownership. Typically, vehicles sit idle on the side of the road for the vast majority of the time, using up space. They also require large CO2 output to produce, and people without a vehicle tend to walk, cycle and take transit more. That benefits cities – reducing congestion and pollution – and improves people’s health through increased activity. What Went Wrong? The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's total earnings, and a deficit 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 streamline operations, improve returns”. Zipcar’s most recent accounts said revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said. London's Unique Challenges However, several experts noted that London has specific problems that made it difficult for the sector to succeed. Patchwork Policies: With numerous local councils, car-club operators face a mosaic of different procedures and costs that made it harder. Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs. Unequal Parking Fees: Locals 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,” argued Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.” A European Example Nations in Europe offer examples for London to follow. Germany enacted national shared mobility laws in 2017, providing a nationwide framework for parking, subsidies 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 trails at 0.7. “What we see is that car sharing around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers. He suggested authorities should start to treat car sharing as a form of mass transit, 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 The company’s competitors can roughly be divided into two camps: 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 P2P service, is already weighing up the UK gap. Rory Brimmer, its UK head, said there was a “big opportunity” 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 some time for other players to build momentum. For now, more people may feel forced to buy cars, and many across London will be without a convenient option. For Rotherhithe community kitchen, the coming weeks will be a rush to find a solution. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the future of shared mobility in the UK.