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A volunteer food project in Rotherhithe has been delivering hundreds of prepared dishes each week for two years to elderly residents and needy locals in south London. Yet, their operations face major disruption by the news that they will not have cars and vans on New Year’s Day.

This organization had relied on Zipcar, the app-based vehicle rental service that allowed its cars from the street. It caused shock across London when it said it would shut down its UK business from 1 January.

It will mean many helpers will be unable to collect food from a major food charity, that collects excess produce from supermarkets, cafes and restaurants. Obvious alternatives are further away, more expensive, or lack the same flexible hours.

“The impact will be massively,” said Vimal Pandya, the project's founder. “My team and I are concerned by the logistical challenge we will face. Many groups like ours are going to struggle.”

“Faced with this reality, they are all worried and thinking: ‘How are we going to carry on?”

A Major Blow for Urban Car-Sharing

The community kitchen’s drivers are among more than half a million people in London who were car club members, who could be left without easy use to vehicles, avoiding the burden and cost of ownership. Most of those members were probably with Zipcar, which held a dominant position in the city.

This shutdown, pending consultation with employees, is a big blow to the vision that vehicle clubs in cities could cut the need for owning a car. Yet, some analysts have noted that Zipcar’s exit need not spell the end for the idea in Britain.

The Potential of Car Sharing

Shared vehicle use is prized by many urbanists and environmentalists as a way of mitigating the problems linked to vehicle ownership. Typically, vehicles sit idle on the street for 95% of the time, occupying parking. They also require large carbon emissions to produce, and people who do not own cars tend to use active travel and take public transport more. That helps urban areas – easing congestion and pollution – and boosts public health through increased activity.

Understanding the Decline

Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its parent company'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 simplify processes, enhance profitability”.

Zipcar’s most recent accounts said revenues had declined as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said.

The Capital's Specific Challenges

However, several experts noted that London has specific problems that made it much harder for the sector to succeed.

• Patchwork Policies: With numerous local councils, car-club operators face a patchwork of varying processes and costs that made it harder.
• Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding unavoidable costs.
• Unequal Parking Fees: Locals in some boroughs pay just £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 per year, creating a significant barrier.

“Our fees should be one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.”

A European Example

Other European countries offer examples for London to follow. Germany enacted national shared mobility laws in 2017, providing a nationwide framework for parking, support and waivers. 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.

“The evidence shows is that car sharing around the world, particularly on the continent, is growing,” said Bharath Devanathan of Invers.

Devanathan said authorities should start to view vehicle clubs as a form of public transport, and link it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “There will be fill this gap.”

The Future Landscape

Other players can be split into two camps:

1. Company-Owned Fleets: Which own or lease their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. Person-to-Person Rentals: Which allow users to hire out their own vehicles via an app – a kind of Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.

One company, a US-headquartered P2P service, is assessing the UK gap. Rory Brimmer, its UK managing director, said there was a “big opportunity” to win more users. “A space exists that is going to need to be filled, because London still needs to move,” Brimmer said.

However, it could take a while for other players to establish themselves. In the meantime, more people may feel forced to buy cars, and others across London will be left without access.

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