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The community kitchen in Rotherhithe has distributed a large number of cooked meals each week for the past two years to elderly residents and needy locals in south London. Yet, the group's plans face major disruption by the news that they will lose cars and vans on New Year’s Day.

This organization depended on Zipcar, the car-sharing company that customers to access its fleet of vehicles from the street. It sent shockwaves across London when it declared it would shut down its UK business from 1 January.

It will mean many helpers cannot collect food from a major food charity, which gathers surplus food from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, more expensive, or lack the same convenient access.

“The impact will be massively,” said Vimal Pandya, the project's founder. “Personally me and my team are concerned by the operational hurdle we will face. Many groups like ours will face difficulties.”

“Faced with this 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 more than half a million people in London registered as car club members, who could be left without easy use to vehicles, avoiding the burden and cost of ownership. Most of those members were probably with Zipcar, which had a near-monopoly position in the city.

This shutdown, subject to consultation with staff, is a serious setback to hopes that car sharing in cities could reduce the need for private vehicle ownership. However, some experts have noted that Zipcar’s departure need not mean the demise for the concept in Britain.

The Promise of Shared Mobility

Shared vehicle use is prized by many urbanists and environmentalists as a way of reducing the ills associated with vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the street for the vast majority of the time, occupying parking. They also involve large carbon emissions to produce, and people who do not own cars tend to use active travel and take public transport more. That helps urban areas – reducing congestion and pollution – and improves 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 revenues were minimal compared with its parent company's total earnings, and a loss that grew to £11.7m in 2024 gave no reason to continue.

The parent company stated 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 less frequent, shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said.

The Capital's Specific Hurdles

Yet, industry observers noted that London has specific problems that made it difficult for the sector to succeed.

• Patchwork Policies: Across 33 boroughs, car-club operators face a patchwork 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.
• Unequal Parking Fees: Locals 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 major disincentive.

“We should literally be charged 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.”

A European Example

Other European countries offer models for London to follow. Germany enacted national shared mobility laws in 2017, providing a nationwide framework for parking, support 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.

He suggested authorities should start to treat car sharing as a form of public transport, and link 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 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 hire out their own vehicles via an app – a kind of 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 “significant chance” 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 some time 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 the volunteers in Rotherhithe, the next month will be a scramble 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 car-sharing in the UK.