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A community kitchen in Rotherhithe has been delivering a large number of prepared dishes weekly for the past two years to pensioners and vulnerable locals in south London. Yet, the group's plans face major disruption by the news that they will lose cars and vans on New Year’s Day.

This organization depended on Zipcar, the app-based vehicle rental service that customers to access its cars from the street. The company caused shock across London when it declared it would shut down its UK business from 1 January.

It will mean many helpers cannot pick up supplies from a major food charity, which gathers surplus food from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, costlier, or do not offer the same convenient access.

“It’s going to be affected massively,” stated Vimal Pandya, the project's founder. “Personally me and my team are worried about the operational hurdle we will face. Many groups like ours will face difficulties.”

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

A Major Blow for City Vehicle Clubs

The community kitchen’s drivers are among more than half a million people in London registered as car club members, now potentially left without convenient access to vehicles, without the hassle and cost of ownership. Most of those members were likely with Zipcar, which held a dominant position in the city.

The planned closure, subject to consultation with staff, is a serious setback to hopes that car sharing in urban areas could reduce the need for private vehicle ownership. Yet, some analysts also suggested that Zipcar’s exit need not spell the end for the concept in Britain.

The Potential of Shared Mobility

Car sharing is valued by many urbanists and green advocates as a way of mitigating the problems associated with vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the side of the road for 95% of the time, using up space. They also require large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take public transport more. That benefits cities – reducing congestion and pollution – and boosts public health through increased activity.

What Went Wrong?

Zipcar was founded 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 total earnings, and a deficit that grew to £11.7m in 2024 gave no reason to continue.

The parent company stated the closure is part of a “wider restructuring across our global operations, where we are taking deliberate steps to streamline operations, enhance profitability”.

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

London's Unique Challenges

Yet, several experts noted that London has specific problems that made it difficult for the sector to succeed.

• Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of different procedures and prices that made it harder.
• New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding extra expenses.
• 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 annually, 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.”

Lessons from Abroad

Nations in Europe offer models for London to follow. Germany enacted national car-sharing legislation in 2017, providing a nationwide framework for parking, support 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 car sharing around the world, especially in Europe, is expanding,” 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 a potential operator was already seriously considering entering the London market: “Operators will fill this gap.”

What Comes Next?

The company’s competitors can be split into two models:

1. Company-Owned Fleets: Which own or lease their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. Person-to-Person Rentals: Which allow users to rent 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 peer-to-peer platform, is already weighing up the UK gap. Rory Brimmer, its UK head, said there was a “significant chance” to win more users. “A space exists that is going to need to be filled, because London still needs to move,” Brimmer said.

Yet, it could take a while for other players to establish themselves. For now, more people may feel forced to buy cars, and others across London will be without a convenient option.

For the volunteers in Rotherhithe, the coming weeks will be a rush to find a solution. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the prospects of shared mobility in the UK.