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The community kitchen in Rotherhithe has distributed hundreds of cooked meals weekly for the past two years to pensioners and needy locals in south London. However, the group's plans face major disruption by the news that they will lose use of New Year’s Day.

This organization depended on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles via smartphone. The company caused shock through the capital when it said it would cease its UK operations from 1 January.

It will mean many volunteers will be unable to pick up supplies from a major food charity, that collects surplus food from grocery stores, cafes and restaurants. Other options are less convenient, costlier, or lack the same flexible hours.

“The impact will be massively,” stated Vimal Pandya, the project's founder. “My team and I are worried about the operational hurdle we will face. A lot of people like ours will face difficulties.”

“Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?”

A Major Blow for Urban Car-Sharing

These volunteers are among more than half a million people in London registered as car club members, who could be left without convenient access to vehicles, without the hassle and cost of ownership. Most of those people were likely with Zipcar, which had a near-monopoly 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 owning a car. Yet, some experts also suggested that Zipcar’s exit need not mean the demise for the concept in Britain.

The Promise of Car Sharing

Shared vehicle use is prized by city planners and environmentalists as a way of mitigating the ills associated with vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the street for the vast majority of the time, using up space. They also require large CO2 output to produce, and people without a vehicle tend to use active travel and take transit more. That helps urban areas – reducing congestion and pollution – and boosts public health through more exercise.

Understanding the Decline

Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income were minimal 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 international business, where we are taking deliberate steps to simplify processes, improve returns”.

Zipcar’s most recent accounts noted revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which is dampening demand for non-essential services,” it said.

The Capital's Specific Challenges

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

• Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of varying processes and prices that made it harder.
• 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 annual 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,” said Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.”

Lessons from Abroad

Other European countries offer models for London to follow. Germany introduced national car-sharing legislation in 2017, providing a nationwide framework for parking, subsidies 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 trails at 0.7.

“The evidence shows is that shared mobility around the world, particularly on the continent, is expanding,” commented Bharath Devanathan of Invers.

Devanathan said authorities should start to treat car sharing 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 roughly be divided into two camps:

1. Company-Owned Fleets: Which maintain 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 rent out their own vehicles via an app – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.

Turo, a US-headquartered peer-to-peer platform, is assessing the UK gap. Rory Brimmer, its UK managing director, said there was a “big opportunity” to win more users. “There is a void 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 solution. The logistical challenge caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the prospects of car-sharing in the UK.