🔗 Share this article What Exactly Has Gone So Awry at Zipcar – and the UK Vehicle-Sharing Market Finished? The community kitchen in Rotherhithe has provided a large number of prepared dishes weekly for two years to pensioners and needy locals in southeast London. However, the group's plans have been thrown into disarray by the news that they will lose cars and vans on New Year’s Day. The group depended on Zipcar, the car-sharing company that allowed its cars from the street. It sent shockwaves through the capital when it declared it would cease its UK business from 1 January. This means many volunteers cannot collect food from the Felix Project, that collects excess produce from grocery stores, cafes and restaurants. Other options are further away, costlier, or lack the same convenient access. “The impact will be 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.” “Knowing the reality, everyone is concerned and thinking: ‘How are we going to carry on?” A Significant Setback for Urban Car-Sharing These volunteers are part of over 500,000 people in London registered as car club members, who could be left without convenient access to vehicles, without the hassle and cost of ownership. The vast majority of those people were probably with Zipcar, which held a dominant position in the city. This shutdown, pending consultation with employees, is a serious setback to hopes that car sharing in cities could reduce the need for private vehicle ownership. Yet, some experts have noted that Zipcar’s departure need not mean the demise for the concept in Britain. The Potential of Shared Mobility Car sharing is prized by many urbanists and green advocates as a way of reducing the ills linked to vehicle ownership. Most cars 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 helps urban areas – easing congestion and pollution – and boosts public health through more exercise. What Went Wrong? The company started in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues 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. The parent company stated the closure is part of a “wider restructuring across our international business, where we are taking targeted actions to simplify processes, enhance profitability”. Its latest financial reports noted revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the ongoing impact of the cost-of-living crisis, which continues to suppress demand for discretionary spending,” it said. London's Unique Hurdles However, industry observers noted that London has specific problems that made it difficult for the sector to succeed. Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of varying processes and prices that complicate operations. New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs. Parking Permit Disparity: Residents in some boroughs pay just £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,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.” Lessons from Abroad Nations in Europe offer examples for London to follow. Germany introduced national car-sharing legislation in 2017, providing a unified system for parking, support 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 growing,” commented Bharath Devanathan of Invers. Devanathan said authorities should start to view vehicle clubs as a form of public transport, and link it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “There will be fill this gap.” The Future Landscape Other players 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. Players include Britain’s Hiyacar and the US’s Getaround and Turo. Turo, a US-headquartered P2P service, is assessing the UK gap. Rory Brimmer, its UK head, 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. Yet, it could take a while for other players to build momentum. For now, more people may choose to buy cars, and others across London will be without a convenient option. For Rotherhithe community kitchen, the next month 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 future of shared mobility in the UK.