Zipcar, world’s biggest car-sharing company, to close UK operation | Automotive industry

Zipcar, the world’s largest car-sharing company, said it will close its UK operation and remove access to its shared fleet across London at the end of this year.

The company, owned by US car rental group Avis Budget, said it would suspend new bookings through its app after December 31 pending the outcome of a consultation on possible job cuts. The UK-based company had 71 employees last year, according to its latest accounts.

The closure will be a blow to advocates of carpooling as a more sustainable form of personal transportation and some car clubs that rely on Zipcar for private carpooling.

In an email to customers, James Taylor, managing director of Zipcar UK, wrote: “We are proposing to cease Zipcar’s operations in the UK and have begun formal consultations with our UK employees today.” Taylor directed customers to his website. CoMoUKTo find other ridesharing options, check out , a national transportation charity.

The closure will follow a challenging period for ride-sharing companies. The Guardian reported in March that Avis Budget had quietly cut Zipcar’s valuation as revenues fell and costs rose in some key markets.

Zipcar’s closure in the UK will coincide with an increase in London’s congestion charge and the rollout of electric cars, including those driven by car club members, from January. Zipcar would have to pay the daily charge of up to £18 for all vehicles entering the zone, except for a small number of vehicles permanently inside, and then decide how much of that amount to pass on to consumers.

Changes to congestion charges are estimated to add £1 million a year to car club costs, most of which will be covered by Zipcar. Zipcar was thought to operate approximately 3,000 vehicles, including cars and pickup trucks; this accounted for the majority of the 5,300 shared vehicles in the UK.

A spokesman for London mayor Sadiq Khan, who is responsible for Transport for London, said: “The mayor’s transport strategy is clear about the important role car clubs can play in reducing the need for private car ownership. That’s why the mayor recently announced that electric car clubs with a dedicated parking space in the congestion charge zone will receive a 100% discount on the congestion charge from January.”

Richard Dilks, chief executive of CoMoUK, said the closure was a sign of a “lack of supportive policy” for motoring clubs. According to car-sharing software company Invers, the UK lags behind other European countries, with just 0.7 shared cars per 10,000 people; On the other hand, 2.2 is shared in Germany and 4.4 in Switzerland.

“We have been warning for some time about the viability of car clubs in London,” Dilks said. “People rely on these things; this is how they work. If these were taken away, that would be a serious blow.”

The charity counted 328,000 car club users in the UK in March. Many will be forced to own private vehicles instead, Dilks said.

Zipcar was: Founded in 2000 It was acquired by two entrepreneurs in Cambridge, Massachusetts, before being acquired by Avis Budget for $491 million (£371 million) in 2013. It continues to operate in 25 U.S. states and three Canadian cities, according to its website. However, the proposed UK closure will come after Zipcar (UK) reported a loss of £11.7 million for 2024.

The company said it would honor existing bookings, including over the Christmas period. He also said that users will be contacted for reservations entering the new year, and paying subscribers will be refunded for the period after December 31.

The concept of carpooling has gained popularity during the coronavirus outbreak, with companies like Hiyacar, Turo and Getaround opening up the ability to rent neighbors’ cars, while Zipcar, Enterprise Car Club and Share Now offer hourly app-based car rentals.

However, companies that operate their own fleets have difficulty making profits due to the relatively high maintenance costs of vehicles dispersed across cities.

Zipcar in the UK had pioneered the “flex” model of operating a fleet of cars without designated parking spaces, allowing users in London to park in residents’ spaces almost anywhere in the city centre. Other cars or pickup trucks were placed in special compartments. All of them are accessed via the mobile application.

Car sharing is generally seen as more sustainable because it avoids the extra carbon dioxide emissions required to produce vehicles for each household.

Zipcar and Avis Budget did not immediately respond to questions about the reasons for the closure.