Car-sharing giant Zipcar has announced plans to close its UK operation by the end of the year.

Zipcar is the UK’s largest car sharing club and runs over 3,000 cars and vans, including 1,000 EVs in London

The US-headquartered company, which is owned by car rental giant Avis Budget Group, will suspend new bookings after 31 December, pending the outcome of a consultation with its 71 staff members.

The company said bookings over the Christmas and before the end of December would be honoured, and customer accounts will remain open until the company has confirmed its decision at the end of the consultation process. New member applications are not being accepted.

In an email to customers, James Taylor, general manager of Zipcar UK, said: “I’m writing to let you know that we are proposing to cease the UK operations of Zipcar and have today started formal consultation with our UK employees.

“We will temporarily suspend bookings, pending the outcome of this consultation. This means it will not be possible to make any new bookings beyond 31 December 2025, pending the outcome of the consultation.”

Zipcar had already closed operations in Oxford, Cambridge and Bristol in 2024 to focus on its core London market.

In its last company accounts, Zipcar warned the cost-of-living crisis was hitting UK customers, resulting in revenues falling to £47m from £53m the year before, while its after-tax losses had widened to £11.6m.

Zipcar was founded in 2000 by two entrepreneurs in Cambridge, Massachusetts. The first cars were launched in Boston and Cambridge in June that year and the scheme launched in the UK in 2003 under the name ‘Streetcar’ before assuming the Zipcar branding in 2007. The company was acquired by Avis Budget Group in March 2013 for around $500m (c.£379m).

In the UK, Zipcar is the largest car-sharing club and runs a fleet of over 3,000 cars and vans, including 1,000+ electric vehicles, used by over 500,000 members. It also has 14,000+ UK Zipcar for Business members.

An Avis Budget Group spokesperson said: “Zipcar has informed UK members that we are proposing to cease Zipcar’s operations in the UK and have begun the required formal consultation with our UK employees. This proposal is part of a broader transformation across our international business, where we are taking deliberate steps to streamline operations, improve returns, and position the company for long-term sustainability and growth.

“As part of this proposal, new bookings in the UK will be suspended beyond 31 December 2025, subject to the outcome of the consultation. Zipcar UK will continue to operate as usual during this period.

“All other markets remain fully operational and unaffected.

“We recognise the impact this proposal may have on our members, employees and partners.  Further information can be found in our FAQs.”

Collaborative Mobility UK (CoMoUK), the UK’s national shared transport charity, described the announcement as a “major blow”.

CoMoUK pointed to research showing car clubs have been proven to cut the overall number of cars on the road, provide low-cost access to cars when they are needed, and support public transport and active travel.

Richard Dilks, chief executive of CoMoUK, said: “Car clubs are making a huge contribution to reducing car ownership and mileage, so if this proposal is confirmed it will be a major blow.

“Every car club vehicle replaces 31 private cars in London, freeing up space, cutting congestion and improving air quality for everyone. We need coherent car and lift sharing plans across London, as this news clearly demonstrates.

“It would also have a significant impact beyond London, harming attempts to provide more low cost access to EVs and support public and active transport.”

Ben Plowden, chief executive of Campaign for Better Transport, said it was hugely disappointing news and likely to result in an increase of private cars on the roads.

“We would urge the UK government to work with city mayors and local authorities to ensure that the policy, legal and financial framework is in place to make car-sharing a going concern in the UK so it can remain an important part of the sustainable transport mix,” he added.

Peer-to-peer car-sharing firm Hiyacar issued a response to the announcement of Zipcar’s closure, noting the challenging conditions the wider mobility and car-sharing sector continues to face.

Despite these pressures, Hiyacar emphasised its confidence in the peer-to-peer car club model and reaffirmed its commitment to expanding community-driven car-sharing across the UK.

“Zipcar has played a significant role in shaping car-sharing in the UK, and their closure is a clear sign of how tough the market has become,” the company said.

“However, it also highlights the importance of exploring more resilient and community-centred alternatives.”

Don Iro, CEO of Hiyacar, said: “Zipcar’s legacy is one of innovation and impact, and we recognise how many people across the UK relied on their service. For those users now looking for alternatives, our focus is on providing a welcoming, reliable and community-driven option – not because of their closure, but because we believe everyone deserves convenient and affordable access to mobility.

“The future of car clubs will be shaped by models that are flexible, cost-effective, and rooted in local communities. Peer-to-peer sharing is uniquely positioned to meet these needs by matching real demand with real people and real streets. This moment isn’t about replacing what came before – it’s about helping users continue to access the freedom and convenience they value. Hiyacar remains fully committed to leading that shift.”