🔗 Share this article What Has Gone So Awry at Zipcar – and the UK Vehicle-Sharing Sector Dead? The volunteer food project in Rotherhithe has been delivering hundreds of cooked meals each week for two years to pensioners and vulnerable locals in southeast London. Yet, their operations have been thrown into disarray by the news that they will not have cars and vans on New Year’s Day. The group had relied on Zipcar, the car-sharing company that customers to access its fleet of vehicles from the street. The company sent shockwaves through the capital when it said it would cease its UK business from 1 January. It will mean many helpers will be unable to pick up supplies 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,” stated Vimal Pandya, the project's founder. “My team and I are worried about the operational hurdle we will face. A lot of people like ours are going to struggle.” “Knowing the reality, everyone is concerned and thinking: ‘How will we continue?’” A Major Blow for City Vehicle Clubs These volunteers are among more than half a million people in London who were car club members, who could be left without easy use to vehicles, avoiding the burden and cost of ownership. The vast majority of those members were probably with Zipcar, which had a near-monopoly position in the city. The planned closure, subject to consultation with staff, is a serious setback to the vision that vehicle clubs in cities could reduce the need for owning a car. However, some experts have noted that Zipcar’s exit need not spell the end for the concept in Britain. The Promise of Car Sharing Car sharing is prized by city planners and green advocates as a way of reducing the ills associated with vehicle ownership. Typically, vehicles sit idle on the street for the vast majority of the time, using up space. They also involve large carbon emissions to produce, and people without a vehicle tend to use active travel and take transit more. That benefits cities – reducing congestion and pollution – and improves public health through more exercise. Understanding the Decline The company started in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its parent company's total earnings, and a loss 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 international business, where we are taking targeted actions to streamline operations, enhance profitability”. Its latest financial reports said revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the economic squeeze, which continues to suppress demand for discretionary spending,” it said. London's Unique Challenges However, industry observers noted that London has particular issues that made it much harder for the sector to succeed. Patchwork Policies: Across 33 boroughs, car-club operators face a patchwork of varying processes and costs that made it harder. Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses. Parking Permit Disparity: Locals in some boroughs pay just £63 for a annual electric car parking permit. A floating car club would pay over £1,100 per year, creating a significant barrier. “We should literally be charged one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models 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 unified system for parking, subsidies 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 lags behind at 0.7. “What we see is that shared mobility around the world, especially in Europe, is growing,” said Bharath Devanathan of Invers. Devanathan said authorities should start to view vehicle clubs as a form of public transport, and integrate it with train and bus stations. He added that one unnamed client was looking at entering the London market: “Operators will fill this gap.” The Future Landscape Other players can be split into two models: Company-Owned Fleets: Which maintain their own cars. Examples 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. 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 head, 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. However, 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 without a convenient option. For the volunteers in Rotherhithe, 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 community groups and the prospects of shared mobility in the UK.