By JON BRADY, SENIOR NEWS REPORTER
Car-sharing club Zipcar has ceased its operations in the UK with immediate effect, prompting a flurry of criticism directed at Sadiq Khan for failing to convince it to stay in London.
The company, which offered car rentals for as little as an hour to members across the capital, had suspended operations at the end of last year as it mulled over whether to pull the plug following a downturn in business.
Its UK arm launched in London in 2007 and expanded to Bristol, Cambridge and Oxford. But it scaled back to operating solely in the capital in 2024, its sole European success story after quitting Brussels, Barcelona and Paris.
But it was not to last: accounts showed the firm has been bleeding money, posting a £4million operating loss in 2024 after rentals and membership fees failed to eclipse the spiralling costs of insurance, maintenance and council parking permits.
Those watching Zipcar's decline had called on Mayor of London Sadiq Khan to do more to support car clubs - which supporters say help to take unnecessary cars off the streets - and say today's news was 'entirely avoidable'.
But in an email to members this morning, general manager James Taylor confirmed that Zipcar UK was no more. He had previously begged for Zipcars to be exempted from the £18 Congestion Charge (CC), which now includes electric cars.
He had warned that the business would become 'commercially unviable' if it was not given a helping hand.
Ultimately, a discount was only given to cars based in the CC zone. As of today, his warning has come to pass - stripping London of 90 per cent of its car club stock.
Car club Zipcar has ceased operations in the UK amid dwindling finances and a drop in use
The news will be unwelcome to Mayor of London Sadiq Khan (pictured) - who had been warned by Zipcar's manager and London's transport committee over a failure to support car clubs
'Following formal consultation with our UK employees, we can now confirm that Zipcar will cease operating in the UK,' he said.
'In accordance with clause 7.5 of the member terms, please take this as your written notice that we will formally close your account in 30 days' time.
'On behalf of the entire Zipcar UK team, whether you used Zipcar occasionally or regularly, we'd like to thank you for being a member and being part of our journey.'
Users who have membership fees outstanding will have these refunded on a pro rata basis, the company added.
Richard Dilks, chief executive of car-sharing advocacy body CoMoUK, said the news was a 'major' blow to the 650,000 members - 550,000 of whom were in London - who used it as an alternative to buying a car of their own.
'Zipcar's departure is a major loss, not just for the hundreds of thousands of people who rely on its vehicles as a cheap, convenient and occasional way of travelling, but for London as a whole,' he said.
'Ultimately, this episode highlights that a more coherent approach to car sharing across the capital is badly needed, and we will continue to work intensively with boroughs, TfL [Transport for London] and operators on this.'
Thomas Turrell, the City Hall Conservatives' transport spokesman said the departure of the firm was 'entirely avoidable'.
'Labour's war on motorists, misguided tax raid and economic mismanagement is driving businesses out of Britain, costing jobs and opportunities, and jeopardising the people who rely on their services,' he said.
'Instead of supporting businesses to create growth, Labour treat businesses like cash-cows, they seen anything involving a car as bad – creating a hostile environment for businesses like Zipcar.
'It is everyday Londoners who then have to pay the price. I hope that companies like Zipcar will be able to return to Britain, to provide employment and services for the public, under a more economically-sound Conservative government and Mayor.'
The Liberal Democrat group in Southwark - which offered Zipcar a year of free parking had it stayed - has written to Mr Khan to express its disappointment, calling the company's departure 'foreseeable' and London 'less attractive' to other car clubs.
Graham Neale, the group's environment spokesperson, said: 'We raised concerns about this direction of travel long before Zipcar announced it was leaving, and the fact it has now happened should prompt some serious reflection about the policies that led us here.'
Zipcar's loss will sting for those who would have used its fleet of cars and vans for odd jobs, moving house, making IKEA runs and days out. But it will also hurt organisations like food banks that relied on Zipcars to distribute meals.
Croydon council had a contract with Zipcar to provide its fleet of staff cars and is yet to respond to questions from the Daily Mail about how its workers will now get about.
The email sent to Zipcar members today informing them that the business was closing
Zipcar offered members both cars and vans for rent for as little as an hour at a time, ideal for those who do not own cars
Despite assurances from Mr Khan that he 'wants to see car clubs thrive', the London Assembly's transport committee is convinced that his failure to properly back car clubs played a role in its demise.
Mr Khan did not act on a report the committee published in April last year calling for a city-wide strategy to support the firm across the capital.
Such a strategy could have eased the administrative nightmare of negotiating parking rates individually with each of its 32 boroughs. This was not, however, in TfL's gift, according to deputy mayor for transport Seb Dance.
Elly Baker, chair of the committee, said: 'There is no sense of urgency from TfL on this issue. There is currently a patchwork approach to car clubs in London and they are failing to reach their full potential.
'TfL must take action now to ensure that car club provision in London does not disappear entirely.'
But Mr Dance said it was not in TfL's gift to pursue such a plan because it does not have authority over parking in each borough.
With Zipcar now officially gone, competitors are circling to take its place. Rival firm Co Wheels is looking at London expansion while Turo - a service for people to rent out their own vehicles described as 'Airbnb for cars' - is ramping up its marketing efforts.
It spent £120,000 on public transport adverts with slogans like 'No Zipcar, no worries'. Unlike Zipcar, Turo only offers car rentals for days at a time - not hours.
But managing director Rory Brimmer told the Standard this week that Zipcar was undone by its own 'doomed' and 'unsustainable' business model that put all of the expense on upkeep on the company itself.
He added: 'Zipcar was a legend of the car-sharing game. I think they have done an amazing job of paving the way for car-sharing.
'There were 550,000 Zipcar users in London who are now looking for an alternative. The risk is that they now go out an buy a car.
'That is not going to solve London's problems. We don't need half a million more cars in the city.'
It is thought that the removal of the 100 per cent discount on the Congestion Charge for electric vehicles played a role in Zipcar's decision to suspend rentals (pictured: a Charge zone sign)
Competitors such as Turo are circling - with the 'Airbnb for cars' firm spending £120,000 on advertising in recent days (pictured)
Richard Dilks, of CoMoUK, says London needs to ensure those firms are given full backing to operate in order to prevent the streets being overstuffed with more cars.
'Our research shows that every car club vehicle replaces 31 private cars in London, freeing up space and making the capital's streets less clogged and more pleasant for everyone,' he added.
'We are hopeful that other car club operators will now step into the gap left by Zipcar, and would encourage them to act quickly to ensure as much continuity as possible for users.
'For that to happen we need to see more moves from London boroughs to make the capital a more workable place in which to offer car sharing services.'
However, it is thought that City Hall had anxieties that Zipcars and other car club vehicles would actually contribute more unnecessary traffic to London's roads - antithetical to Sadiq Khan's flagship transport strategy.
Zipcar's decision, however, could actually fly in the face of his plan to cut car ownership in favour of walking, cycling and taking public transport.
A CoMoUK survey commissioned after Zipcar began consulting on its closure found some 80 per cent of those who had been using it are either buying, or considering buying, a car of their own.
A spokesperson for the Mayor of London said: 'We recognise that car clubs provide convenient access to vehicles for journeys that can't be made by public transport, supporting less congested streets and cleaner air in London.
'We are engaging extensively with car club providers, industry groups and the boroughs who manage the provision of car clubs to see what more support can be provided.
'This includes hosting a major roundtable next month, bringing together key players in the sector.'