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A volunteer food project in Rotherhithe has been delivering hundreds of prepared dishes each week for the past two years to elderly residents and vulnerable locals in south London. However, their operations face major disruption by the announcement that they will lose cars and vans on New Year’s Day.

This organization had relied on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles via smartphone. The company caused shock through the capital when it declared it would cease its UK business from 1 January.

It will mean many helpers cannot collect food from a major food charity, that collects surplus food from grocery stores, cafes and restaurants. Other options are further away, more expensive, or do not offer the same convenient access.

“The impact will be massively,” said 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, they are all worried and thinking: ‘How are we going to carry on?”

A Significant Setback for Urban Car-Sharing

These volunteers are part of over 500,000 people in London registered as car club members, now potentially left without easy use 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.

The planned closure, subject to consultation with employees, is a serious setback to the vision that vehicle clubs in urban areas could reduce the need for private vehicle ownership. Yet, some analysts have noted that Zipcar’s departure need not spell the end for the concept in Britain.

The Promise of Shared Mobility

Shared vehicle use is valued by many urbanists and green advocates as a way of mitigating the ills associated with 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 transit more. That benefits cities – easing congestion and pollution – and improves public health through increased activity.

What Went Wrong?

The company started in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its owner's total earnings, and a deficit that reached £11.7m in 2024 gave no reason 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 noted revenues had fallen as drivers took fewer and shorter trips. “These changes reflect the ongoing impact of the cost-of-living crisis, which continues to suppress demand for discretionary spending,” it said.

The Capital's Specific Hurdles

Yet, industry observers noted that London has specific problems that made it difficult for the company and its rivals to succeed.

• Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of varying processes and costs that complicate operations.
• Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding extra expenses.
• Unequal Parking Fees: Residents in some boroughs pay just £63 for a annual 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,” said Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”

A European Example

Nations in Europe offer examples for London to follow. Germany introduced national car-sharing legislation in 2017, providing a nationwide framework for parking, subsidies 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 trails 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 integrate it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “There will be fill this gap.”

The Future Landscape

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

1. Company-Owned Fleets: Which own or lease their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. Peer-to-Peer Services: Which allow users to rent 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 head, 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. For now, more people may feel forced to buy cars, and others across London will be without a convenient option.

For Rotherhithe community kitchen, the next month will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of shared mobility in the UK.