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Global car sharing service Zipcar is set to shut down its UK operations by the end of the year.
Zipcar has confirmed it will suspend new bookings after 31 December, pending consultation with its staff.
The news comes as a shock to the car sharing sector after Zipcar was hailed as the “best investment” made by its parent group, Avis Budget, more than a decade ago.
“I recall having lunch in Stockholm with the former Executive Chairman of Avis Budget Group. At the time, he described the Zipcar acquisition as the best investment ABG had ever made,” Kasper Gjedsted, Group CEO of GreenMobility and former CEO of Avis Budget Group (ABG) in Sweden and Denmark, told Zag Daily.
In an email to members, Zipcar’s UK General Manager James Taylor confirmed that the company had launched a formal consultation with employees and that existing bookings would be honoured, including over the Christmas period. According to the company’s latest accounts, Zipcar reported an after-tax loss of £11.6 million in 2024. Revenues fell from £53 million to £47 million.
The exit removes access to a fleet that has more than 550,000 members in London. Zipcar is one of the largest car sharing operators in the UK, where approximately 650,000 people use the service to rent vehicles by the hour or day.
“A stark warning”
The decision has drawn immediate responses from industry bodies.
Richard Dilks, Chief Executive of shared mobility national charity Collaborative Mobility UK (CoMoUK), told Zag Daily the UK environment remains challenging for operators.
“The environment for car sharing companies in the UK is sadly characterised by neglect and exploitation more than it is by facilitation,” Dilks said. “At the same time, there is a lack of supportive policy relating to car sharing at both a London and a national level, which also carries real consequences.”
He added the potential closure of Zipcar is a “stark warning” for the sector, which is being squeezed by rising costs including local authority permit fees and changes to London’s Congestion Charge.
CoMoUK described the proposal as a “major blow” for shared mobility. Car club models have been linked to reducing private car ownership and improving access to EVs and transport alternatives.
Zipcar is set to leave the market at a time when London ranks behind major European cities in the rollout of electric car clubs. London is 30th out of 42 cities analysed by the Clean Cities Campaign. Research cited by the campaign shows each car club vehicle in London replaces 29 private cars.
Oliver Lord, Head of the Clean Cities Campaign UK, warned the loss would hinder efforts to reduce reliance on private vehicles. “The best way to help Londoners break free from polluting cars is to ensure the alternatives are as attractive and convenient as possible,” he said. He added that a lack of support for electric car clubs has held back solutions that can be deployed quickly and at scale.
“A perfect storm”
Gjedsted said the closure reflects the difficulty of scaling car sharing profitably under current economic conditions.
“Ultimately, this looks like a case of a great product unable to deliver profitable growth in the current economic climate,” he said, pointing to rising interest rates, insurance premiums and operating costs. He called it a “perfect storm” that few have survived.
Zipcar has reduced its UK footprint over recent years, having closed Oxford, Cambridge and Bristol to focus on London. The company said its UK exit is part of a plan “to streamline operations, improve returns, and position the company for long-term sustainability and growth.”
For advocates of shared mobility, the departure of an operator once considered Avis’ most strategically valuable acquisition signals renewed concern about the viability of car sharing in the UK. Dilks said the announcement demonstrates the need for coordinated car sharing policy across London, warning that operators remain exposed to rising costs and a lack of supportive regulation.
