ZipCar Ceases Operations in the UK
ZipCar, the leading car-sharing platform in the UK, announced its decision to cease operations in the country by the end of this year. This US-based company, owned by Avis Budget, has recently informed its customers about the temporary suspension of new bookings following December 31.
Formal Consultation with Employees
James Taylor, the UK head of ZipCar, communicated via email that a formal consultation process has begun with its 71 employees. While new bookings will be halted, existing reservations made before the end of the month will still be honored, allowing members to use the service through the Christmas holidays.
Operational Background and Membership
- ZipCar boasts approximately 650,000 members in the UK.
- Renters can access cars by the hour or day through a mobile app.
- The service allows members to collect vehicles from designated parking spots.
Previously, ZipCar had scaled back its operations, closing locations in Oxford, Cambridge, and Bristol to concentrate its services in London, where it has over 550,000 members.
Financial Challenges Faced by ZipCar
Recent company accounts for 2024 reveal that ZipCar’s revenue fell from £53 million to £47 million, mainly due to the ongoing “cost of living crisis” impacting UK consumers. The company also reported a widening after-tax loss of £11.6 million.
Increasing Costs and New Charges
Membership fees charged by ZipCar cover the costs associated with fueling or charging vehicles. However, rising energy prices have intensified financial strain on the service. Furthermore, the impending expansion of London’s congestion charge, which will now also apply to electric vehicles starting December 26, adds another layer of financial responsibility.
While the company has not explicitly mentioned the congestion charge in its communications to members, it represents an additional cost consideration as ZipCar evaluates its operational strategy in the UK.
