The world's largest car-sharing company, Zipcar, has announced it will close its entire UK operation, a move that will remove access to its shared vehicle fleet across London by the end of the year.
Formal Consultation and Service Suspension
Owned by the US rental giant Avis Budget, Zipcar will suspend all new bookings made through its app after 31 December 2024. This suspension is pending the outcome of a formal consultation with staff regarding potential redundancies. The UK operating company employed 71 people last year, according to its latest accounts.
In an email to customers, Zipcar UK's General Manager, James Taylor, confirmed the proposal to cease operations and the start of the employee consultation. Taylor directed affected users to the website of CoMoUK, a national shared transport charity, to find alternative car-sharing options.
Financial Pressures and Policy Challenges
The closure follows a difficult period for the car-sharing sector. The Guardian reported in March that Avis Budget had quietly written down the value of its Zipcar subsidiary amid falling revenues and rising costs in key markets.
The shutdown also coincides with significant changes to London's Congestion Charge from January, which will now include electric vehicles. Zipcar would have faced an estimated £1 million in additional annual costs, as it would need to pay the up-to-£18 daily charge for most of its fleet entering the zone. The company operated nearly 3,000 of the UK's estimated 5,300 shared vehicles.
Richard Dilks, chief executive of CoMoUK, called the closure a sign of a "failure to have supportive policy" towards car clubs. He noted the UK lags behind Europe, with only 0.7 shared cars per 10,000 people compared to 2.2 in Germany and 4.4 in Switzerland.
Impact on Users and the Future of Car-Sharing
The decision is a major blow to advocates of car-sharing as a more sustainable form of transport that reduces private car ownership. CoMoUK counted 328,000 car club users in the UK in March, many of whom may now be forced to consider private vehicle ownership.
Zipcar, founded in 2000 and bought by Avis Budget in 2013 for $491 million, will continue operations in 25 US states and three Canadian cities. The proposed UK closure follows the UK arm reporting an £11.7 million loss for 2024.
The company has stated it will honour all existing bookings, including over Christmas, and will contact users with reservations extending into the new year. Paying subscribers will receive refunds for any period beyond 31 December.
