Mobility Partnership Ireland Urges VAT Cut on Bike and Car Rentals to Drive Sustainable Commuting

The Government should reduce VAT on short-term bike and car rental from 13.5% to 9% to incentivise uptake of bike rentals and reduce car use.

Mobility Partnership Ireland (MPI), the national coalition of shared transport providers, is calling on the Government to reduce VAT on short-term bike and car rental services from 13.5% to 9% as part of Budget 2026.

To further incentivise bike-share take-up by urban commuters, including for last mile journeys and to support the ongoing viability of commercial bike-share services, MPI calls on the Government to reduce VAT on short-term bike rental from 13.5% to 9%.

This targeted measure, MPI argues, would significantly boost the affordability and uptake of shared mobility services across our cities, while delivering tangible progress on national climate and transport goals.

Shared bikes and short-term car rentals remain subject to VAT of 13%, creating an additional cost for users and disincentives commuters to move away from private cars to more sustainable alternatives.

Chairperson of Mobility Partnership Ireland, Hugh Cooney said: “Reducing VAT to 9% would directly lower costs for commuters, making it more attractive to choose bike-share or short-term car rental for daily trips. At the same time, it would enhance the commercial viability of operators who are investing in more sustainable, tech-enabled mobility options. This is a modest but meaningful step the Government can take to reduce car dependency and accelerate progress toward climate and transport targets.”

Shared bike services have seen a marked increase in demand as city centre cycling infrastructure has improved in recent years. Yet despite their growing contribution to daily mobility, these services remain more costly than using cars.

A VAT reduction would represent a small but meaningful intervention to stabilise and expand these services in line with commuter demand. The call for a VAT reduction also reflects broader European and domestic policy directions. EU VAT law permits member states to apply reduced VAT rates to short-term rental services, and the European Commission has recently emphasised the importance of incentivising corporate and shared fleets as part of its roadmap to decarbonise transport.

Ireland’s Climate Action Plan also sets ambitious targets for a 50% increase in daily active travel journeys and a 130% increase in public transport use by 2030. MPI argues that the Government cannot meet these goals without also strengthening support for shared mobility services.

What is Mobility Partnership Ireland?

Mobility Partnership Ireland (MPI) is a coalition of commercial providers across bike hire, car rental, taxi services, bus services, and integrated payment solutions committed to enhancing Ireland’s sustainable transport network.

MPI operators are leading the way when it comes to delivering on multi-modal, shared mobility ambitions, while helping to develop new mobility technology. Over the past 5 years, over 32 million journeys have been facilitated by MPI operators.

Mobility Partnership Ireland’s mission is to Move Sustainable Transport Forward. Working with Government, state agencies, and local authorities, MPI aims to make the Irish transport sector more sustainable through supporting and integrating more forms of sustainable transport; and incentivising more commuters to use more modes of sustainable transport as practical alternatives to private cars.