🔗 Share this article What Has Gone Awry at Zipcar – and the UK Car-Sharing Market Dead? A community kitchen in Rotherhithe has provided hundreds of prepared dishes weekly for the past two years to elderly residents and needy locals in southeast London. Yet, the group's plans have been thrown into disarray by the announcement that they will lose access to New Year’s Day. The group had relied on Zipcar, the car-sharing company that customers to access its cars via smartphone. It caused shock through the capital when it declared it would shut down its UK business from 1 January. This means many helpers cannot collect food from the Felix Project, that collects surplus food from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, more expensive, or do not offer the same flexible hours. “It’s going to be affected massively,” stated Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the logistical challenge 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 City Vehicle Clubs These volunteers are among over 500,000 people in London registered as car club members, now potentially left without easy use to vehicles, avoiding the burden and cost of ownership. Most of those people were probably with Zipcar, which had a near-monopoly position in the city. The planned closure, subject to consultation with staff, is a big blow to hopes that car sharing in cities could reduce the need for owning a car. Yet, some experts also suggested that Zipcar’s exit need not spell the end for the idea in Britain. The Potential of Car Sharing Shared vehicle use 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 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 walk, cycle and take public transport more. That helps urban areas – easing congestion and pollution – and boosts people’s health through increased activity. Understanding the Decline Zipcar was founded in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK income were minimal compared with its parent company's total earnings, 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 deliberate steps to streamline operations, enhance profitability”. Zipcar’s most recent accounts noted revenues had fallen as drivers took less frequent, shorter trips. “This trend reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for non-essential services,” it said. London's Unique Hurdles Yet, several experts noted that London has specific problems that made it difficult for the company and its rivals to succeed. Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of varying processes and prices that complicate operations. New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding unavoidable costs. Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 per year, creating a major disincentive. “We should literally be charged one-twentieth of a resident’s permit,” said Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.” A European Example Other European countries offer examples for London to follow. Germany introduced national car-sharing legislation in 2017, providing a unified system 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 trails at 0.7. “What we see is that car sharing around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers. Devanathan said authorities should start to treat car sharing as a form of public transport, and link it with train and bus stations. He added that one unnamed client 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: Company-Owned Fleets: Which own or lease their own cars. This includes 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. 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 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 build momentum. In the meantime, 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 rush to find a way. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the future of car-sharing in the UK.