Major car hire firm halts UK operations and blames 'spiralling costs' of Sadiq Khan's ULEZ

Major car hire company Zipcar has suspended its operations in the UK, warning it could leave the country altogether if Sadiq Khan presses ahead with abolishing the Congestion Charge exemption for electric vehicles. This comes after the company proposed shutting down its UK operations by the end of the year.

Bosses had warned the firm could leave if Sadiq Khan pressed ahead with abolishing the Congestion Charge exemption for electric vehicles, a new charging regime that came into effect today (January 2). Zipcar UK boss James Taylor recently pleaded for a Congestion Charge discount, lest the firm become "commercially unviable" to operate in the capital, according to MailOnline. The London Mayor did offer a discount to vehicles within the Charging zone, but that is of little benefit to those driving in from further afield. Opening the Zipcar app in a UK location displays the message: "No cars available nearby." It is consulting with its 71 employees on their future.

Car clubs offer easy, short–term access to vehicles to those who don't own one of their own. Zipcar was the biggest in the capital, giving people affordable access to cars and vans for as little as an hour at a time, with fuel and charging included.

Richard Dilks, chief executive of campaign group CoMoUK, is quoted by MailOnline as telling an emergency London Assembly meeting last month: "The impact is profound, but we do not yet understand it fully. We have not experienced it yet. 

"My suspicion is that if we do not all come together and put our shoulders to the wheel on this, and even if we do, through 2026, we will see the true horror revealing itself of just how much this mattered."

Last month, Zipcar UK boss Mr Taylor told customers: "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 December 31, 2025, pending the outcome of the consultation."

Seb Dance, London's deputy mayor for transport, recently said: "I think it is only right and proper that we ask the parent company to reconsider a decision that will clearly have an impact not just on the users of the service, but the direct employees of Zipcar as well."

It is understood that Zipcar's UK operation had 71 employees at the end of 2024, according to its most recently filed accounts.

Accounts showed that the van and car hire firm saw losses deepen to £5.7 million in 2024 after a decrease in customer trips.

An Avis Budget Group spokesperson said "new bookings in the UK will be suspended beyond 31 December 2025, subject to the outcome of the consultation".

The spokesperson also said: "Zipcar 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.

"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."