🔗 Share this article What Has Gone So Awry at Zipcar – and the UK Car-Sharing Market Finished? The community kitchen in Rotherhithe has provided hundreds of cooked meals each week for two years to pensioners and needy locals in south London. However, their operations face major disruption by the announcement that they will not have cars and vans on New Year’s Day. This organization had relied on Zipcar, the car-sharing company that allowed its cars from the street. It sent shockwaves across London when it declared it would shut down its UK business from 1 January. It will mean many volunteers cannot collect food from a major food charity, which gathers surplus food from supermarkets, cafes and restaurants. Other options are less convenient, costlier, or do not offer the same convenient access. “The impact will be massively,” stated Vimal Pandya, the project's founder. “My team and I are concerned by the logistical challenge we will face. A lot of people like ours will face difficulties.” “Faced with this reality, they are all worried and thinking: ‘How will we continue?’” A Major Blow for Urban Car-Sharing The community kitchen’s drivers are among more than half a million people in London who were car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. The vast majority of those people were probably with Zipcar, which had a near-monopoly position in the city. This shutdown, pending consultation with staff, is a serious setback to hopes that car sharing in urban areas could cut the need for private vehicle ownership. Yet, some experts also suggested that Zipcar’s exit need not mean the demise for the idea in Britain. The Potential of Shared Mobility Shared vehicle use is valued by many urbanists and environmentalists as a way of mitigating the ills linked to vehicle ownership. Typically, vehicles sit idle on the side of the road for 95% of the time, occupying parking. They also involve large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take transit more. That benefits cities – reducing congestion and pollution – and boosts people’s health through more exercise. Understanding the Decline Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its owner's total earnings, and a loss that reached £11.7m in 2024 gave little incentive to continue. Avis Budget has said the closure is part of a “wider restructuring across our global operations, where we are taking deliberate steps to streamline operations, enhance profitability”. Zipcar’s most recent accounts said revenues had declined 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 Hurdles Yet, industry observers noted that London has specific problems that made it much harder for the sector to succeed. Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of different procedures and costs that made it harder. New Costs: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs. Unequal Parking Fees: Residents 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 major disincentive. “Our fees should be one-twentieth of a resident’s permit,” argued 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 examples 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 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 expanding,” said Bharath Devanathan of Invers. He suggested authorities should start to treat car sharing 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 Other players can be split 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 rent out their own vehicles via an app – a kind of 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. However, it could take a while for other players to build momentum. In the meantime, more people may feel forced to buy cars, and many across London will be left without access. For Rotherhithe community kitchen, the coming weeks will be a scramble 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 car-sharing in the UK.