Car-sharing platform Zipcar – owned by rental car giant Avis Budget – is withdrawing from the British market. The shutdown will occur by the end of this calendar year. This decision is particularly notable as the company faces catastrophic financial loss and a looming market crash.
Zipcar is uniquely positioned as the only UK car-sharing firm to have just under 650,000 members in the UK. Of that number, more than 550,000 citizens reside in London. The platform has proved a convenient and flexible solution for urban transportation, with members able to rent cars by the hour or day. Advanced-level memberships make our costs – primarily fuel and charging – club fees. This feature alone makes it an enticing choice among people who don’t need a vehicle 24/7.
Their decision to shut down affects 15 employees and comes in the wake of decreased revenues. Revenue fell from £53 million last year to £47 million this year. Its after-tax losses increased to £11.6 million and its management decided it could no longer continue with its UK business. James Taylor, the UK chief of the car-share scheme Zipcar, noted that stress is increasing. This strain is exacerbated by the cost of living crisis still faced by consumers.
In recent months, Zipcar has withdrawn from prominent university towns, recently shuttering operations in Oxford, Cambridge and Bristol. These closures are emblematic of the company’s efforts to reduce its network in line with falling passenger demand and increasing revenue challenges. With 71 staff members permanently employed in the UK, the upcoming shutter also puts new questions into the air regarding their future employment.
Despite the overall cessation of operations, Zipcar has committed to honoring existing bookings that are set to conclude by the end of this month. After December 31, the company will stop taking new reservations while it continues to ready the company for the impending shutdown.
Zipcar’s distinctive bright green branding will soon disappear from British roads. The company is leaving the market. Zipcar’s exit highlights the challenges that car-shares are facing in the UK. These challenges are further exacerbated as economic conditions worsen and consumer preferences shift towards more sustainable options.