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A volunteer food project in Rotherhithe has provided a large number of cooked meals each week for two years to elderly residents and needy locals in southeast London. However, their operations face major disruption by the announcement that they will lose cars and vans on New Year’s Day.

The group depended on Zipcar, the car-sharing company that allowed its fleet of vehicles via smartphone. The company caused shock across London when it declared it would cease its UK operations from 1 January.

This means many helpers will be unable to pick up supplies from a major food charity, that collects surplus food from supermarkets, cafes and restaurants. Other options are further away, more expensive, or lack the same flexible hours.

“The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the operational hurdle we will face. A lot of people like ours are going to struggle.”

“Faced with this reality, they are all worried and thinking: ‘How will we continue?’”

A Major Blow for Urban Car-Sharing

These volunteers are part of more than half a million people in London who were car club members, who could be left without convenient access to vehicles, without the hassle and cost of ownership. Most of those people 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 car sharing in urban areas could cut the need for private vehicle ownership. Yet, some analysts also suggested that Zipcar’s exit need not mean the demise for the idea in Britain.

The Potential of Car Sharing

Shared vehicle use is valued by city planners and environmentalists as a way of mitigating the ills linked to vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for the vast majority of the time, occupying parking. 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 – easing congestion and pollution – and boosts people’s health through more exercise.

What Went Wrong?

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

The parent company stated the closure is part of a “broader transformation across our international business, where we are taking targeted actions to streamline operations, enhance profitability”.

Its latest financial reports noted revenues had fallen as drivers took fewer and 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 specific problems that made it difficult for the company and its rivals to succeed.

• Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of different procedures and costs that complicate operations.
• New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
• Parking Permit Disparity: Residents 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 major disincentive.

“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 introduce cleaner models in their place.”

Lessons from Abroad

Nations in Europe offer examples for London to follow. Germany introduced national car-sharing legislation in 2017, providing a unified system for parking, support and exemptions. Now, the country has several 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, especially in Europe, is growing,” commented Bharath Devanathan of Invers.

He suggested authorities should start to view vehicle clubs as a form of mass transit, and integrate 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.”

What Comes Next?

The company’s competitors can be split 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. Person-to-Person Rentals: Which allow users to rent out their own vehicles via an app – similar to Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.

One company, a US-headquartered P2P service, is already weighing up 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.

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

For the volunteers in Rotherhithe, the next month will be a rush to find a way. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the prospects of car-sharing in the UK.