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A community kitchen in Rotherhithe has distributed hundreds of cooked meals weekly for two years to elderly residents and vulnerable locals in south London. Yet, the group's plans face major disruption by the announcement that they will lose access to New Year’s Day.

The group depended on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles from the street. The company sent shockwaves through the capital when it said it would cease its UK business from 1 January.

This means many volunteers cannot collect food from the Felix Project, that collects excess produce from supermarkets, cafes and restaurants. Other options are less convenient, costlier, or lack the same flexible hours.

“It’s going to be affected 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.”

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

A Major Blow for Urban Car-Sharing

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

The planned closure, pending consultation with employees, is a serious setback to hopes that vehicle clubs in urban areas could cut the need for private vehicle ownership. However, some experts also suggested that Zipcar’s departure need not mean the demise for the idea in Britain.

The Promise of Car Sharing

Car sharing is valued by many urbanists and environmentalists as a way of mitigating the ills associated with vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for 95% of the time, using up space. They also require large CO2 output to produce, and people without a vehicle tend to walk, cycle and take public transport more. That benefits cities – reducing congestion and pollution – and boosts public health through more exercise.

What Went Wrong?

The company started in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's overall annual revenue, and a loss that grew to £11.7m in 2024 gave no reason to continue.

Avis Budget has said the closure is part of a “wider restructuring across our international business, where we are taking targeted actions to streamline operations, enhance profitability”.

Its latest financial reports said revenues had declined as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which is dampening demand for non-essential services,” it said.

The Capital's Specific Hurdles

Yet, several experts noted that London has specific problems that made it much harder for the company and its rivals to succeed.

• Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of different procedures and prices that complicate operations.
• Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
• Parking Permit Disparity: Residents in some boroughs pay as little as £63 for a annual electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a major disincentive.

“Our fees should be one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We remove vehicles. 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 waivers. 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,” said Bharath Devanathan of Invers.

Devanathan said authorities should start to view vehicle clubs as a form of mass transit, 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.”

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. Peer-to-Peer Services: Which allow users to hire 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 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 some time for other players to establish themselves. In the meantime, more people may feel forced to buy cars, and many across London will be left without access.

For Rotherhithe community kitchen, the next month will be a rush to find a way. The logistical challenge caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the prospects of shared mobility in the UK.