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A community kitchen in Rotherhithe has distributed hundreds of cooked meals weekly for two years to elderly residents and needy locals in southeast London. However, their operations have been thrown into disarray by the news that they will lose access to New Year’s Day.

This organization had relied on Zipcar, the app-based vehicle rental service that allowed its cars from the street. It sent shockwaves across London when it declared it would cease its UK business from 1 January.

It will mean many volunteers will be unable to pick up supplies from the Felix Project, that collects excess produce from supermarkets, cafes and restaurants. Other options are less convenient, costlier, or do not offer the same convenient access.

“It’s going to be affected massively,” said 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 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 convenient access to vehicles, without the hassle 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 staff, is a big blow to the vision that vehicle clubs in urban areas could cut the need for owning a car. However, some analysts also suggested that Zipcar’s departure need not spell the end for the idea in Britain.

The Potential of Car Sharing

Car sharing is prized by city planners and green advocates as a way of mitigating the problems linked to vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the street for 95% of the time, occupying parking. They also involve large CO2 output to produce, and people who do not own cars tend to use active travel and take public transport more. That helps urban areas – easing congestion and pollution – and boosts people’s health through increased activity.

Understanding the Decline

Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its parent company's total earnings, and a deficit 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 global operations, where we are taking deliberate steps to simplify processes, enhance profitability”.

Zipcar’s most recent accounts said 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.

London's Unique Challenges

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 patchwork of varying processes and costs that made it harder.
• Congestion Charge: The closure comes as electric cars becoming liable for London’s congestion charge, adding extra expenses.
• Parking Permit Disparity: Locals in some boroughs pay as little as £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 annually, 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.”

Lessons from Abroad

Nations in Europe offer examples for London to follow. Germany enacted national car-sharing legislation in 2017, providing a nationwide framework for parking, support 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, particularly on the continent, is expanding,” said 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 looking at entering the London market: “There will be fill this gap.”

The Future Landscape

The company’s competitors can roughly be divided 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 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 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 a while for other players to establish themselves. 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 coming weeks will be a scramble to find a way. The logistical challenge caused by Zipcar’s exit highlights the wider implications of its departure on community groups and the future of shared mobility in the UK.