Zipcar's UK exit points to failure of government policy on car sharing

News that Zipcar is poised to shut its doors on its only remaining UK operation (in London) has prompted an outpouring of frustration from loyal users. The restaurant critic Jay Rayner posted on Bluesky that he was “dismayed” by the decision. “The car club availability was at the heart of our decision to abandon car ownership around five years ago," he added. Car sharing schemes (sometimes known as car clubs) are on the rise in Europe, with the number of vehicles available across the region up 8% last year to 129,000, according to a November report by car sharing tech company Invers. In the UK, though, this alternative to urban car ownership has regressed. Despite being the second most populous European country, the UK had a shared-car fleet of just 5477 in 2024, compared with 45,400 for Germany and 13,862 for France. And the exit of market leader Zipcar and its fleet of nearly 3000 cars and vans would dramatically shrink that figure. So why have car share schemes fared so badly in the UK? Car sharing took off in urban areas as an smarter alternative to classic rental companies, thanks to technology that allowed members to unlock street-parked cars. Infrequent drivers could ditch car ownership in the knowledge that they could call on a handy alternative for trips when only a car would do, such as Ikea visits. “Paying around £1,500pa for a car that’s going to be sitting idle for 98% of the time seems bonkers,” one user wrote underneath Rayner’s post. Zipcar’s announcement that it will halt UK bookings at the end of the year should be a wake-up call for government officials at local and national level, the head of shared-transport charity CoMoUK told Autocar. “It’s been brewing for a long time. There’s been a real lack of policy,” Richard Dilks said. Car sharing companies face multiple hurdles in rolling out and achieving profitability that the UK has done little to address, in contrast to countries and cities elsewhere across Europe. “There has been very little positive facilitation. In fact, we’ve seen the opposite,” Dilks said. For example, London boroughs typically charge car clubs 10 times the amount to street-park their cars than it charges residents for permits to park their own vehicles. Dilks cites the case of one London borough that wanted to charge 28 times the amount. The lack of joined-up thinking among London’s 32 boroughs, plus the City of London and the overarching (but often toothless) Transport for London (TfL) authority has long frustrated car sharing companies. Mercedes-backed Car2Go exited London in 2014 partly because of the hassle negotiating with each of the city’s boroughs, while BMW's DriveNow managed to place cars in only nine boroughs in the six years it operated in the capital before exiting in 2020. Cities in Europe on the other hand will often include car sharing within their transport infrastructure schemes, for example mandating parking places for shared vehicles in new developments and making money available for adding EV chargers. “Our suggestions are listened to and largely incorporated into the city’s planning process,” Hermann Trick, CEO of German car sharing scheme Stadtmobil Stuttgart, told Invers for its latest report. Car sharing schemes including Enterprise Car Club and Hiyacar do operate in other UK cities, but London has always played an outsized role. Zipcar had concentrated its business there after closing its operations in Bristol, Cambridge and Oxford in 2024 but was vocal in the need for authorities in the capital to bolster a precarious position. “Currently the risk is all on the operator when they go into a new location,” Zipcar said in a January submission to the all-party London Assembly Transport Committee looking at car sharing schemes. It noted that car sharing supported mayor Sadiq Khan's goal of reducing car journeys in London by cutting private car use and thus called on TfL to become a facilitator, rather than a passive observer or worse. The Committee agreed, writing in its April report: “We believe TfL is stalling the progression of car clubs in London." Evidence of this includes the lack of an exemption from the TfL-administered London Congestion Charge for shared cars. Zipcar’s expanding electric fleet (currently 35% of its total) would also have been hit by the ending of exemptions for EVs from January 2026, which would cost it £1m per year, according to CoMoUK. The shift to electric power has hurt car clubs. With no access to cheap home charging, car clubs have been hit with much higher charging bills. “The rising cost of charging has been a real wrecking ball in last few years,” Dilks said. CoMoUK has calculated that running an EV costs around £6200 more for a car club compared with a petrol car. Furthermore, users are less keen on them for longer journeys. Zipcar UK flagged higher charging bills as well as rising insurance costs for all vehicles in its 2024 company accounts, which showed a £11.7m loss after tax, following a £364,000 loss for 2023. The company’s insurance bill had jumped from £4.9m to £6.5m, it reported. Insurance has also hit so-called peer-to-peer car sharing companies like Turo, which offers a platform where car owners can rent their own vehicles. “Leaps in insurance have wrecked that business model,” Dilks said. Indeed, Getaround, which entered the UK market in 2019 by acquiring Drivy, wound up its UK operations last year. The car sharing market had also attracted car makers looking for alternative revenue streams and ways to sell in otherwise restrictive urban markets, and some are still present, albeit after a shake-up. Early movers BMW and Mercedes eventually paired up then sold their loss-making ShareNow car sharing service to Stellantis’s Free2Move mobility arm in 2022. Renault’s Mobilize Share and related Zity brand operate in European cities including Milan and Madrid, with the Mobilize Duo two-seat EV specially aimed at that market. Toyota’s Kinto Share meanwhile operates in countries such as Sweden and Denmark. However, success is very dependent on legislator backing, and so far in the UK that hasn't been forthcoming. Zipcar warned in its January submission to the London Assembly Transport Committee that success partly depended on boroughs making car ownership more expensive, for example by rolling out more controlled parking zones (CPZs). Many of the outer borough councils in particular are less keen to do that. A report published by the London Councils organisation noted that outer boroughs have much less CPZ coverage, Ealing having the highest coverage at “just” 47%. That could increase as boroughs look to reduce private car miles, but without the same easy access to public transport offered by the inner city boroughs, private cars are likely to remain popular. It’s a similar situation for many UK cities. Still, the exit of London’s dominant car sharing company is likely to focus attention on the UK’s far more hostile operating conditions compared with the rest of Europe. Said Dilks: “The loss of Zipcar would be a big blow for London and a warning sign for the rest of the country.”

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Zipcar's UK exit points to failure of government policy on car sharing

Avis-owned car sharing firm has paused London bookings until 31 December 2025 while it considers an exit

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Zipcar's UK exit points to failure of government policy on car sharing

Avis-owned car sharing firm has paused London bookings until 31 December 2025 while it considers an exit

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