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A community kitchen in Rotherhithe has distributed hundreds of prepared dishes each week for the past two years to elderly residents 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.

The group depended on Zipcar, the car-sharing company that allowed its cars 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 pick up supplies from a major food charity, which gathers excess produce from supermarkets, 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 logistical challenge we will face. A lot of people like ours are going to struggle.”

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

A Major Blow for City Vehicle Clubs

These volunteers are part of over 500,000 people in London who were car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those people were likely with Zipcar, which had a near-monopoly position in the city.

The planned closure, pending consultation with staff, is a serious setback to the vision that vehicle clubs in urban areas could reduce the need for private vehicle ownership. However, some analysts have noted that Zipcar’s exit need not mean the demise for the idea in Britain.

The Promise of Shared Mobility

Car sharing is valued by many urbanists and environmentalists as a way of reducing the ills linked to vehicle ownership. Typically, vehicles sit idle on the side of the road for the vast majority of the time, using up space. 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 benefits cities – easing congestion and pollution – and boosts people’s 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 revenues barely registered compared with its owner's total earnings, and a deficit that reached £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 simplify processes, enhance profitability”.

Its latest financial reports said revenues had declined as drivers took less frequent, shorter trips. “These changes 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

Yet, several experts noted that London has particular issues that made it much harder for the sector to succeed.

• Patchwork Policies: Across 33 boroughs, car-club operators face a mosaic of varying processes and costs that complicate operations.
• New Costs: The closure comes as electric cars start paying London’s congestion charge, adding extra expenses.
• Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a annual electric car parking permit. A floating car club would pay over £1,100 annually, creating a major disincentive.

“Our fees should be 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

Nations in Europe offer models for London to follow. Germany enacted 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 car sharing around the world, particularly on the continent, is expanding,” said Bharath Devanathan of Invers.

Devanathan said authorities should start to view vehicle clubs 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: “Operators will 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. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. Peer-to-Peer Services: 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.

One company, a US-headquartered P2P service, is already weighing up the UK gap. Rory Brimmer, its UK managing director, said there was a “big opportunity” 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 choose to buy cars, and others across London will be left without access.

For Rotherhithe community kitchen, the next month will be a scramble to find a way. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the prospects of shared mobility in the UK.