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The community kitchen in Rotherhithe has distributed hundreds of prepared dishes each week for the past two years to elderly residents and needy locals in southeast London. However, their operations face major disruption by the news that they will not have use of New Year’s Day.

This organization depended on Zipcar, the car-sharing company that customers to access its cars via smartphone. The company sent shockwaves across London when it said it would cease its UK operations from 1 January.

This means many helpers will be unable to collect food from a major food charity, which gathers excess produce from supermarkets, cafes and restaurants. Other options are further away, more expensive, or lack the same flexible hours.

“It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are worried about the operational hurdle 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 Significant Setback for Urban Car-Sharing

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

The planned closure, subject to consultation with employees, is a serious setback to hopes that vehicle clubs in urban areas could cut the need for private vehicle ownership. Yet, some analysts also suggested that Zipcar’s exit need not mean the demise for the concept in Britain.

The Potential of Shared Mobility

Car sharing is prized by many urbanists and green advocates as a way of mitigating the ills linked to vehicle ownership. Most cars sit idle on the side of the road for the vast majority of the time, occupying parking. They also involve large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take transit more. That benefits cities – easing congestion and pollution – and improves people’s health through more exercise.

Understanding the Decline

Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company's overall annual revenue, 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 “broader transformation across our international business, where we are taking deliberate steps to streamline operations, enhance profitability”.

Zipcar’s most recent accounts noted revenues had fallen as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said.

London's Unique Hurdles

However, several experts 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 mosaic of varying processes and prices that complicate operations.
• New Costs: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
• Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 annually, creating a significant barrier.

“We should literally be charged one-twentieth of a private parking cost,” said Robert Schopen of Co Wheels. “We remove vehicles. 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 unified system 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 lags behind at 0.7.

“The evidence shows is that shared mobility 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 link it with train and bus stations. He added that one unnamed client was already seriously considering entering the London market: “There will be fill this gap.”

What Comes Next?

The company’s competitors can roughly be divided into two models:

1. Fleet Operators: Which own or lease 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. Players include Britain’s Hiyacar and the US’s Getaround and Turo.

Turo, a US-headquartered P2P service, 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.

Yet, it could take some time for other players to build momentum. For now, more people may feel forced to buy cars, and many across London will be left without access.

For the volunteers in Rotherhithe, the next month will be a rush to find a way. The delivery problem caused by Zipcar’s exit highlights the wider implications of its departure on vital services and the prospects of car-sharing in the UK.