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The community kitchen in Rotherhithe has distributed a large number of cooked meals weekly for the past two years to elderly residents and needy locals in southeast London. Yet, their operations face major disruption by the announcement that they will not have access to New Year’s Day.

This organization depended on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles via smartphone. It sent shockwaves across London when it declared it would cease its UK operations from 1 January.

It will mean many helpers will be unable to collect food from the Felix Project, which gathers surplus food from grocery stores, cafes and restaurants. Other options are less convenient, more expensive, or do not offer the same flexible hours.

“The impact will be massively,” stated 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.”

“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 part of more than half a million 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 probably 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 cities could cut the need for owning a car. However, some analysts also suggested that Zipcar’s departure need not mean the demise for the idea in Britain.

The Potential of Car Sharing

Car sharing is valued by city planners and green advocates as a way of mitigating the problems associated with vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for the vast majority of the time, occupying parking. They also require large CO2 output to produce, and people without a vehicle tend to use active travel and take public transport more. That helps urban areas – easing congestion and pollution – and boosts public health through increased activity.

Understanding the Decline

Zipcar was founded 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 little incentive to continue.

The parent company stated the closure is part of a “broader transformation across our international business, where we are taking targeted actions to streamline operations, improve returns”.

Zipcar’s most recent accounts noted revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which is dampening demand for non-essential services,” it said.

London's Unique Challenges

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

• Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of different procedures and costs that complicate operations.
• Congestion Charge: The closure comes as electric cars start paying London’s congestion charge, adding extra expenses.
• 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 major disincentive.

“Our fees should be one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We remove vehicles. We’re putting less polluting cars in their place.”

Lessons from Abroad

Other European countries offer models for London to follow. Germany introduced national shared mobility laws 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 trails at 0.7.

“What we see is that car sharing around the world, particularly on the continent, is expanding,” said Bharath Devanathan of Invers.

He suggested 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 looking at entering the London market: “Operators will fill this gap.”

The Future Landscape

Other players can be split into two camps:

1. Fleet Operators: 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 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 peer-to-peer platform, is assessing the UK gap. Rory Brimmer, its UK head, 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.

However, it could take some time for other players to build momentum. In the meantime, more people may choose to buy cars, and others across London will be without a convenient option.

For the volunteers in Rotherhithe, 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 community groups and the future of shared mobility in the UK.