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A volunteer food project in Rotherhithe has distributed a large number of prepared dishes weekly for two years to pensioners and vulnerable locals in south London. Yet, their operations face major disruption by the announcement that they will lose use of New Year’s Day.

This organization had relied on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles via smartphone. It caused shock across London when it said it would cease its UK business from 1 January.

It will mean many volunteers cannot collect food from a major food charity, that collects surplus food from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, costlier, or do not offer the same convenient access.

“The impact will be massively,” said Vimal Pandya, the project's founder. “My team and I are concerned by the operational hurdle we will face. Many groups like ours are going to struggle.”

“Knowing the reality, everyone is concerned and thinking: ‘How are we going to carry on?”

A Significant Setback for Urban Car-Sharing

The community kitchen’s drivers are among over 500,000 people in London who were car club members, now potentially left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those people were likely with Zipcar, which held a dominant position in the city.

The planned closure, pending consultation with staff, is a big blow to hopes that car sharing in urban areas could reduce the need for owning a car. Yet, some experts have noted that Zipcar’s departure need not spell the end for the concept in Britain.

The Promise of Car Sharing

Shared vehicle use is valued by many urbanists and green advocates as a way of mitigating the problems associated with vehicle ownership. Most cars sit idle on the side of the road for the vast majority of the time, using up space. They also require large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take public transport more. That benefits cities – easing congestion and pollution – and improves 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 revenues barely registered compared with its owner's total earnings, 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”.

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

The Capital's Specific Hurdles

However, several experts noted that London has particular issues that made it much harder for the company and its rivals to succeed.

• Patchwork Policies: With numerous local councils, 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 extra expenses.
• Parking Permit Disparity: Residents in some boroughs pay as little as £63 for a annual electric car parking permit. A floating car club would pay over £1,100 per year, creating a significant barrier.

“We should literally be charged one-twentieth of a private parking cost,” argued 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 enacted national shared mobility laws in 2017, providing a unified system 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 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.

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 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 camps:

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 hire out their own vehicles via an app – a kind of 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 “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.

However, it could take some time for other players to build momentum. 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 underscores the wider implications of its departure on vital services and the future of shared mobility in the UK.