Car-sharing giant Zipcar has announced it will cease all UK operations, pulling its shared fleet off London's streets from 1 January next year. The shock decision leaves more than half a million registered car club members in the capital seeking alternatives and casts doubt on the viability of the shared vehicle model in British cities.
Community Services and Volunteers Left in the Lurch
The immediate impact is being felt by community groups who relied on the flexible, app-based service. The Rotherhithe Community Kitchen in south London, which delivers hundreds of meals weekly to pensioners and vulnerable residents, faces a logistical crisis. Founder Vimal Pandya said the closure would affect the group "massively", jeopardising their ability to collect surplus food from charity The Felix Project.
"Knowing the reality, they are all worried and thinking: 'How are we going to carry on?'" Pandya stated. The kitchen's volunteers are among many who utilised Zipcar's near-monopoly service to access vehicles without the cost and hassle of ownership.
What Went Wrong for the Car-Sharing Pioneer?
Zipcar, founded in 2000 and bought by US rental group Avis Budget for $491m in 2013, has struggled financially in the UK. Its most recent accounts showed a loss of £11.7m in 2024, with revenues falling to £47m as drivers took fewer and shorter trips amid the cost-of-living crisis. For Avis Budget, which has global revenues of $12bn, the UK operation became untenable.
The company said the closure is part of a "broader transformation" to streamline international operations and improve returns. Last year, it already withdrew from Oxford, Cambridge, and Bristol to focus solely on London, a strategy that has now also been abandoned.
Structural Challenges in London and Lessons from Europe
Experts point to specific London-based hurdles that hampered Zipcar and rivals. Operating across 33 boroughs meant navigating a complex patchwork of parking permit processes and prices. The financial disparity is stark: while a resident in Kensington and Chelsea pays just £63 annually to park an electric car, a floating car club vehicle faces a £1,110 fee. For petrol or diesel models, the cost rockets to £2,217.
Robert Schopen of Co Wheels, which operates successfully in other UK cities, argued clubs should pay "one-twentieth of a resident's permit" as they take cars off streets and replace them with less polluting models. Elly Baker, chair of the London Assembly transport committee, called for central leadership to create a single process and unified price guidelines for car club permits across boroughs.
The UK lags significantly behind European counterparts in car-sharing adoption. Germany, which introduced national legislation in 2017, has 5.4 shared cars per 10,000 people. France has 2.1 and Belgium 6.3. The UK manages only 0.7, with Zipcar accounting for over half of that figure.
Is This the End of the Road for UK Car-Sharing?
Despite the setback, industry observers believe the market gap will be filled. Bharath Devanathan of Invers, a vehicle-sharing software company, stated that car sharing is growing globally and that "this is definitely not the end". He suggested authorities should treat car clubs as a form of public transport and integrate them with train and bus networks.
Potential successors include both fleet operators, like Denmark's GreenMobility or Stellantis's Free2Move, and peer-to-peer platforms such as Hiyacar and Turo. Rory Brimmer, managing director of Turo UK, said there was a "big opportunity" and a "void that is going to need to be filled, because London still needs to move".
However, building momentum will take time. In the interim, there are fears that some Londoners may be forced back into private car ownership, increasing congestion and pollution, while others, like the volunteers at Rotherhithe Community Kitchen, are left scrambling for solutions as the new year approaches.
