🔗 Share this article What Has Gone Awry at Zipcar – Is the UK Car-Sharing Sector Finished? The community kitchen in Rotherhithe has provided hundreds of cooked meals each week for two years to elderly residents and needy locals in south London. However, the group's plans have been thrown into disarray by the news that they will lose use of New Year’s Day. The group had relied on Zipcar, the car-sharing company that customers to access its cars from the street. The company sent shockwaves through the capital when it declared it would cease its UK operations from 1 January. This means many volunteers cannot 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 flexible hours. “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. A lot of people like ours are going to struggle.” “Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?” A Significant Setback for City Vehicle Clubs The community kitchen’s drivers are part of more than half a million people in London registered as car club members, who could be left without convenient access to vehicles, avoiding the burden and cost of ownership. The vast majority of those members were likely with Zipcar, which held a dominant position in the city. The planned closure, pending consultation with staff, is a serious setback to hopes that car sharing in urban areas could cut the need for owning a car. However, some experts have noted that Zipcar’s departure need not mean the demise for the idea in Britain. The Promise of Shared Mobility Shared vehicle use is prized by many urbanists and green advocates as a way of mitigating the ills linked to vehicle ownership. Typically, vehicles sit idle on the side of the road for the vast majority of the time, using up space. They also require large carbon emissions to produce, and people who do not own cars tend to use active travel and take transit more. That helps urban areas – easing congestion and pollution – and improves public health through more exercise. What Went Wrong? The company started in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company's total earnings, and a deficit that grew to £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 targeted actions to simplify processes, improve returns”. Its latest financial reports said revenues had declined as drivers took fewer and shorter trips. “These changes reflect the continuing effect of the economic squeeze, which continues to suppress demand for non-essential services,” it said. The Capital's Specific Challenges Yet, industry observers noted that London has specific problems that made it much harder for the company and its rivals to succeed. Inconsistent Rules: Across 33 boroughs, car-club operators face a patchwork of different procedures and costs 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 just £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 annually, 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 Nations in Europe offer models for London to follow. Germany introduced national car-sharing legislation in 2017, providing a nationwide framework for parking, support 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 lags behind at 0.7. “The evidence shows is that shared mobility around the world, especially in Europe, is expanding,” said Bharath Devanathan of Invers. He suggested 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: “There will be fill this gap.” The Future Landscape The company’s competitors can roughly be divided into two models: Fleet Operators: 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 – 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 Rotherhithe community kitchen, the coming weeks will be a rush to find a solution. 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.