🔗 Share this article What Exactly Has Gone Wrong at Zipcar – Is the UK Vehicle-Sharing Sector Dead? The volunteer food project in Rotherhithe has distributed hundreds of prepared dishes weekly for two years to pensioners and needy locals in south London. Yet, their operations face major disruption by the announcement that they will lose cars and vans on New Year’s Day. The group depended on Zipcar, the app-based vehicle rental service that allowed its cars from the street. It caused shock through the capital when it said it would cease its UK operations from 1 January. This means many volunteers will be unable to collect food from the Felix Project, which gathers surplus food from supermarkets, cafes and restaurants. Other options are less convenient, costlier, or do not offer the same flexible hours. “The impact will be massively,” stated Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by the operational hurdle we will face. Many groups like ours are going to struggle.” “Faced with this reality, everyone is concerned and thinking: ‘How are we going to carry on?” A Major Blow for City Vehicle Clubs The community kitchen’s drivers are among 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. Most of those people were probably with Zipcar, which had a near-monopoly position in the city. This shutdown, subject to consultation with employees, is a serious setback to hopes that car sharing in urban areas could reduce the need for private vehicle ownership. Yet, 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 valued 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 benefits cities – reducing congestion and pollution – and improves public health through increased activity. Understanding the Decline The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company's overall annual revenue, and a deficit that reached £11.7m in 2024 gave no reason to continue. The parent company stated the closure is part of a “wider restructuring across our global operations, where we are taking targeted actions to streamline operations, improve returns”. Its latest financial reports noted revenues had declined as drivers took fewer and shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which is dampening demand for non-essential services,” it said. The Capital's Specific Challenges However, several experts noted that London has particular issues that made it difficult for the company and its rivals to succeed. Patchwork Policies: With numerous local councils, car-club operators face a patchwork of varying processes and prices that made it harder. New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding unavoidable costs. Unequal Parking Fees: Locals in some boroughs pay just £63 for a annual 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 resident’s permit,” said Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.” A European Example Nations in Europe offer models for London to follow. Germany introduced national car-sharing legislation in 2017, providing a unified system for parking, subsidies and waivers. Now, the country has 5.4 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 car sharing around the world, especially in Europe, is expanding,” said Bharath Devanathan of Invers. Devanathan said authorities should start to view vehicle clubs as a form of mass transit, and link it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “Operators will fill this gap.” The Future Landscape Other players can roughly be divided into two models: Company-Owned Fleets: Which own or lease their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility. Person-to-Person Rentals: Which allow users to hire out their own vehicles via an app – a kind of Airbnb for cars. Examples 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 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. However, it could take some time for other players to establish themselves. In the meantime, 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 rush to find a way. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the prospects of car-sharing in the UK.