🔗 Share this article What Exactly Has Gone Awry at Zipcar – and the UK Car-Sharing Sector Finished? The community kitchen in Rotherhithe has provided hundreds of cooked meals weekly for the past two years to pensioners and needy locals in south 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 had relied on Zipcar, the car-sharing company that allowed its fleet of vehicles 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 excess produce from supermarkets, cafes and restaurants. Other options are further away, costlier, or do not offer the same convenient access. “The impact will be massively,” stated Vimal Pandya, the project's founder. “Personally me and my team are worried about the operational hurdle we will face. Many groups like ours will face difficulties.” “Knowing the reality, they are all worried and thinking: ‘How will we continue?’” A Significant Setback for Urban Car-Sharing These volunteers are among over 500,000 people in London registered as car club members, now potentially left without easy use 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. This shutdown, pending consultation with employees, is a big blow to hopes that car sharing in cities could cut the need for private vehicle ownership. However, some analysts also suggested that Zipcar’s departure need not mean the demise for the concept in Britain. The Potential of Car Sharing Shared vehicle use is valued by city planners and environmentalists as a way of reducing the problems linked to vehicle ownership. Most cars sit idle on the street for the vast majority 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 – easing congestion and pollution – and improves public health through more exercise. What Went Wrong? Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income were minimal compared with its owner's overall annual revenue, and a deficit that reached £11.7m in 2024 gave little incentive 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 simplify processes, improve returns”. Zipcar’s most recent accounts noted revenues had fallen 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. London's Unique Hurdles However, several experts noted that London has specific problems that made it difficult for the sector to succeed. Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of different procedures 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: Residents 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 major disincentive. “We should literally be charged one-twentieth of a resident’s permit,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models in their place.” A European Example Nations in Europe offer examples 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 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, particularly on the continent, is expanding,” commented Bharath Devanathan of Invers. He suggested authorities should start to view vehicle clubs as a form of public transport, and link it with train and bus stations. He added that one unnamed client was looking at entering the London market: “There will be fill this gap.” The Future Landscape Other players can roughly be divided 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 rent out their own vehicles via an app – a kind of Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo. One company, a US-headquartered peer-to-peer platform, is assessing the UK gap. Rory Brimmer, its UK managing director, said there was a “big opportunity” 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 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 wider implications of its departure on community groups and the future of car-sharing in the UK.