Zipcar to shut UK car share operations ahead of new London EV charge

The Zipcar car-sharing UK service and vehicle rental system in London is set to close in the New Year after its US owner pulled the plug on operations in the run up to the imposition of London Congestion Charges on electric vehicles.

The changes to the congestion charges have been estimated to add £1m annually to car club costs, most of that borne by Zipcar. Zipcar is estimated to run nearly 3,000 vehicles, including cars and vans in the UK – the majority of the 5,300 such shared vehicles in the country. It has over 1,000 electric vehicles in its fleet, primarily in London.

The company has about 650,000 members in the UK who rent cars by the hour or day from an app and collect the vehicles from parking spaces, making it the UK’s largest car-sharing operator.

Last year Zipcar closed its operations in Oxford, Cambridge and Bristol to focus on its core London market, where it has more than 550,000 members.

The car hire business has begun a formal consultation with employees in the UK and will stop taking new bookings beyond the end of the year, according to a company statement to customers from Zipcar UK general manager James Taylor.

Taylor directed customers to the website of CoMoUK, the national charity for shared transport, to find other car-sharing options.Richard Dilks, chief executive of CoMoUK, said the closure was a sign of a “failure to have supportive policy” towards car clubs. The UK lagged behind other European countries, with only 0.7 shared cars per 10,000 people, compared with 2.2 in Germany and 4.4 in Switzerland, according to car sharing software company Invers.

“We’ve been warning for a while about the viability of car clubs in London,” said Dilks. “People rely on these things – that’s how they work. If that’s taken away it’s a significant blow.” The charity counted 328,000 car club users in the UK in March. Dilks said many of them would be now forced into private car ownership instead.

Zipcar in the UK had pioneered the “flex” model of running a fleet of cars with no set parking space, allowing users of the service in London to park in residents’ bays almost anywhere. Other cars or vans offered elsewhere were stationed in dedicated bays. All are accessed via a mobile app.

Zipcar’s UK losses rose to £11.7m in 2024 compared to just £364,000 the previous year, while revenue slipped from £51m to £47m.

The world’s biggest car-sharing company, Zipcar, is now owned by the US car rental group Avis Budget.

The closure will be a blow to advocates of carsharing as a more sustainable form of personal transport, as well as to some car clubs that relied on Zipcar to share private vehicles.

“External cost pressures continued to negatively impact the company. Whilst there was some improvement in fuel prices, electricity costs remained high throughout 2024,” the firm said in its accounts, published last month. “This particularly affected the company due to the size of the electric fleet and the fact that fuel costs are included in the cost of the rental.

“Resale market values continued to be challenging, which also drove higher costs. Year on year increases in the cost of motor insurance also placed further pressures on costs,” the accounts statement said.

Zipcar did not cite it as a reason why it was withdrawing from the UK, but commentators note it coincides with the decision by London Mayor Sadiq Khan to extend the Congestion Charge to electric vehicles.

The charge, from which EVs were previously exempt, will mean drivers will face a £13.50 daily charge from the beginning of next year. EVs also now face the forthcoming eVED charge per mile due to be introduced in 2028.

Zipcar was founded in Cambridge, Massachusetts, and was listed on the Nasdaq before being acquired by Avis in 2013.