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A community kitchen in Rotherhithe has distributed hundreds of prepared dishes each week for two years to elderly residents and vulnerable locals in south London. However, their operations face major disruption by the news that they will lose cars and vans on New Year’s Day.

This organization had relied on Zipcar, the car-sharing company that allowed its cars from the street. The company caused shock across London when it declared it would cease its UK operations from 1 January.

This means many volunteers cannot collect food from the Felix Project, that collects surplus food from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, costlier, or lack the same flexible hours.

“It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “My team and I are concerned by the logistical challenge we will face. Many groups like ours are going to struggle.”

“Knowing the reality, everyone is concerned and thinking: ‘How will we continue?’”

A Significant Setback for City Vehicle Clubs

These volunteers are among over 500,000 people in London who were car club members, who could be left without convenient access to vehicles, without the hassle and cost of ownership. The vast majority of those people were probably with Zipcar, which had a near-monopoly position in the city.

This shutdown, pending consultation with staff, is a big blow to the vision that vehicle clubs in urban areas could cut the need for owning a car. Yet, some experts also suggested that Zipcar’s departure need not spell the end for the concept in Britain.

The Potential of Car Sharing

Shared vehicle use is valued by city planners and environmentalists as a way of reducing the ills linked to vehicle ownership. Most cars sit as two-tonne dead weights on the street for 95% of the time, using up space. They also require large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take transit more. That helps urban areas – reducing congestion and pollution – and improves people’s health through increased activity.

Understanding the Decline

The company started in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK income barely registered compared with its owner's overall annual revenue, and a deficit that grew to £11.7m in 2024 gave little incentive to continue.

Avis Budget has said the closure is part of a “wider restructuring across our global operations, where we are taking deliberate steps to streamline operations, improve returns”.

Zipcar’s most recent accounts noted revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the ongoing impact of the economic squeeze, which continues to suppress demand for non-essential services,” it said.

London's Unique Hurdles

Yet, several experts noted that London has particular issues that made it much harder for the sector to succeed.

• Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of varying processes and prices that complicate operations.
• New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
• Parking Permit Disparity: Locals in some boroughs pay as little as £63 for a annual electric car parking permit. A floating car club would pay over £1,100 annually, creating a major disincentive.

“We should literally be charged one-twentieth of a resident’s permit,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models in their place.”

A European Example

Other European countries offer examples for London to follow. Germany enacted national car-sharing legislation in 2017, providing a nationwide framework for parking, subsidies and exemptions. Now, the country has 5.4 shared cars per 10,000 people, while France has 2.1 and Belgium has 6.3. The UK lags behind at 0.7.

“What we see is that shared mobility around the world, particularly on the continent, is growing,” said Bharath Devanathan of Invers.

He suggested authorities should start to treat car sharing as a form of mass transit, and link it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “Operators will fill this gap.”

What Comes Next?

Other players can roughly be divided into two camps:

1. Fleet Operators: Which maintain their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. Peer-to-Peer Services: Which allow users to hire out their own vehicles via an app – a kind of Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.

Turo, a US-headquartered P2P service, is assessing the UK gap. Rory Brimmer, its UK head, said there was a “big opportunity” to win more users. “There is a void that is going to need to be filled, because London still needs to move,” Brimmer said.

However, it could take some time for other players to build momentum. For now, more people may choose to buy cars, and many across London will be left without access.

For the volunteers in Rotherhithe, the coming weeks will be a rush to find a solution. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the prospects of shared mobility in the UK.