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A community kitchen in Rotherhithe has distributed a large number of prepared dishes each week for the past two years to pensioners and needy locals in south London. Yet, the group's plans face major disruption by the announcement that they will lose use of New Year’s Day.

The group depended on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles via smartphone. It sent shockwaves through the capital when it said it would shut down its UK business from 1 January.

It will mean many volunteers will be unable to collect food from the Felix Project, which gathers excess produce from grocery stores, cafes and restaurants. Other options are further away, costlier, or do not offer the same convenient access.

“It’s going to be affected massively,” said Vimal Pandya, the project's founder. “Personally me and my team are concerned by the logistical challenge we will face. Many groups like ours will face difficulties.”

“Faced with this reality, everyone is concerned and thinking: ‘How will we continue?’”

A Significant Setback for City Vehicle Clubs

These volunteers are among over 500,000 people in London registered as car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. The vast majority 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 hopes that vehicle clubs in urban areas could cut the need for owning a car. However, some analysts have noted that Zipcar’s departure need not spell the end for the concept in Britain.

The Promise of Shared Mobility

Shared vehicle use is prized by many urbanists and green advocates as a way of reducing the ills associated with vehicle ownership. Most cars sit idle on the street for the vast majority of the time, using up space. They also require 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 – easing congestion and pollution – and boosts people’s health through more exercise.

What Went Wrong?

The company started in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK income were minimal compared with its parent company's overall annual revenue, and a deficit that grew to £11.7m in 2024 gave no reason to continue.

Avis Budget has said the closure is part of a “broader transformation across our global operations, where we are taking targeted actions to streamline operations, improve returns”.

Zipcar’s most recent accounts noted revenues had declined as drivers took less frequent, shorter trips. “These changes reflect the ongoing impact of the economic squeeze, which continues to suppress demand for discretionary spending,” it said.

London's Unique Hurdles

However, several experts noted that London has particular issues that made it difficult for the sector to succeed.

• Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of varying processes and costs that made it harder.
• Congestion Charge: The closure coincides with electric cars becoming liable for 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 significant barrier.

“Our fees should be one-twentieth of a resident’s permit,” said 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 examples for London to follow. Germany introduced national car-sharing legislation 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 trails at 0.7.

“The evidence shows is that car sharing around the world, particularly on the continent, is growing,” commented Bharath Devanathan of Invers.

He suggested authorities should start to treat car sharing as a form of mass transit, and link 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 own or lease their own cars. This includes 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.

One company, a US-headquartered P2P service, is assessing 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.

However, it could take a while 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 Rotherhithe community kitchen, the next month will be a rush to find a way. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the future of shared mobility in the UK.