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Zipcar to Exit UK Market by Year-End Amid Tough Conditions for Car-Sharing

Zipcar, the car-sharing platform owned by rental giant Avis Budget Group, is set to shut down its operations in the United Kingdom by the end of 2022, marking a major retreat for the U.S. company in one of its key international markets.

In an email to members, Zipcar's UK general manager James Taylor said the company had initiated formal consultations with employees over the planned exit. All outstanding bookings will be honored through the end of this month, he added.

The move comes as a blow to Zipcar's dominance in the UK's car-sharing landscape. With around 650,000 members, the platform was the country's leading player, allowing users to rent vehicles by the hour or day through a mobile app.

But the company has struggled to maintain profitability in the UK amid rising costs and stiffer competition from rivals like Enterprise Car Club and independent operators. Zipcar previously scaled back its presence in Oxford, Cambridge and Bristol last year.

"All other Zipcar markets remain unaffected," a spokesperson for Avis Budget confirmed, noting the company would continue to operate the service in other countries.

The exit from the UK underscores the challenges facing car-sharing platforms as they navigate a post-pandemic landscape. While the sector enjoyed a surge in demand during lockdowns, a return to personal car ownership has put pressure on utilization rates and margins.

"The car-sharing model is proving difficult to scale profitably, especially for players without a broader mobility ecosystem to leverage," said Alex Chen, an analyst at AlphaFlow Research. "Zipcar's retreat shows how even established players are struggling to make the numbers work."

The news comes as Avis Budget itself grapples with a slowdown, with the company reporting a 7% drop in third-quarter revenue last month. Shares in the rental giant have fallen over 30% so far this year.

Industry sources said Zipcar's UK withdrawal could pave the way for consolidation, with rivals like Enterprise or Ubeeqo potentially looking to acquire parts of the business or its customer base.

For now, Zipcar members in Britain will have until the end of December to use up any remaining rental credits before the service shuts down completely.