🔗 Share this article What Has Gone So Awry at Zipcar – and the UK Car-Sharing Sector Dead? A volunteer food project in Rotherhithe has provided a large number of prepared dishes each week for the past two years to elderly residents and needy locals in southeast London. However, the group's plans have been thrown into disarray by the news that they will lose access to New Year’s Day. This organization depended on Zipcar, the app-based vehicle rental service that allowed its cars from the street. It caused shock across London when it declared it would cease its UK operations from 1 January. It will mean many helpers will be unable to pick up supplies from the Felix Project, that collects surplus food from grocery stores, cafes and restaurants. Other options are less convenient, costlier, or do not offer the same convenient access. “It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the operational hurdle we will face. Many groups like ours will face difficulties.” “Faced with this 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 more than half a million 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 had a near-monopoly position in the city. The planned closure, subject to consultation with employees, is a big blow to the vision that vehicle clubs in urban areas could cut the need for private vehicle ownership. However, some analysts have noted that Zipcar’s exit need not mean the demise for the concept in Britain. The Promise of Shared Mobility Car sharing is valued by many urbanists and environmentalists as a way of mitigating the ills associated with vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the street for the vast majority of the time, using up space. They also involve large CO2 output to produce, and people who do not own cars tend to walk, cycle and take transit more. That benefits cities – easing congestion and pollution – and boosts people’s 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 barely registered compared with its owner's total earnings, and a deficit 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 simplify processes, enhance profitability”. Its latest financial reports said 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 Challenges Yet, several experts noted that London has particular issues that made it much harder for the sector to succeed. Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of varying processes and prices that complicate operations. Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs. Parking Permit Disparity: Locals in some boroughs pay as little as £63 for a annual electric car parking permit. A similar shared vehicle 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 introduce cleaner models in their place.” Lessons from Abroad Nations in Europe offer examples for London to follow. Germany enacted national car-sharing legislation in 2017, providing a nationwide framework for parking, subsidies 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 trails at 0.7. “The evidence shows is that car sharing around the world, especially in Europe, is growing,” commented 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 looking at entering the London market: “There will be fill this gap.” What Comes Next? The company’s competitors can be split into two camps: Company-Owned Fleets: Which maintain their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility. Peer-to-Peer Services: Which allow users to hire out their own vehicles via an app – similar to Airbnb for cars. Players include 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 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 a while for other players to establish themselves. For now, more people may choose to buy cars, and many across London will be left without access. For Rotherhithe community kitchen, the next month will be a rush to find a way. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on community groups and the prospects of car-sharing in the UK.