The UK car sharing market is set for a major shake up following the announcement that Zipcar, the US based, Avis Budget Group owned firm, is planning to cease its entire operation in the country. The company, which has been a dominant force in flexible urban mobility for years, confirmed the proposal to customers via email, stating that it has begun a formal consultation process with its UK employees. While existing bookings through Christmas will be honored, new bookings will be suspended after December 31, 2025, marking the imminent end of the service and leaving over 650,000 members needing alternative transport solutions.
The proposed withdrawal comes after Zipcar’s UK subsidiary reported deepening financial losses, reaching £11.7 million in 2024. The company cited a difficult combination of external cost pressures and shifting market dynamics as the primary drivers of this decision. Specifically, the firm pointed to soaring electricity and insurance costs, the volatile market for used car resale values, and a decline in customer trips and average trip durations attributed to the ongoing cost of living crisis. Despite attempts to promote its largely electric vehicle (EV) fleet as a sustainable alternative to private car ownership, the high operating costs proved unsustainable in the UK market.
A significant, though unconfirmed, strategic factor in the closure is the impending change to London’s Congestion Charge rules. From January 2026, electric vehicles will, for the first time, lose their exemption and be subject to the daily charge. With Zipcar operating a large fleet of electric vehicles primarily within London, this new £13.50 daily fee would have significantly increased the firm’s operating expenses and undermined the financial model of its short term rentals, creating an untenable business environment just as the company was already struggling with profitability. This regulatory shift appears to have been the final, decisive blow to the UK operation.
The departure of Zipcar, which at one point accounted for a significant portion of the UK's shared car fleet, leaves a substantial void in the urban mobility landscape. Customers, particularly in London, who relied on the service for quick errands, flexible journeys, and as a primary alternative to car ownership, will now face limited options. Industry analysts are concerned that this failure may signal wider challenges for the shared mobility sector in the UK, highlighting the difficulty of achieving scale and profitability amid high regulatory costs and volatile economic factors. The decision will inevitably lead to dozens of job losses for the company’s remaining UK workforce.
As Zipcar winds down its operations, the focus shifts to remaining competitors like Enterprise Car Club and other local services to absorb the sudden surge in demand from displaced members. The closure underscores the volatility of the UK’s commitment to urban car sharing as a solution to congestion and pollution. The long term impact will determine if this exit pushes former users back toward private vehicle ownership, or if the remaining car sharing providers can capitalize on the gap left by the dominant market leader.
