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A volunteer food project in Rotherhithe has provided hundreds of cooked meals each week for the past two years to elderly residents and needy locals in southeast London. Yet, their operations have been thrown into disarray by the announcement that they will lose cars and vans on New Year’s Day.

The group had relied on Zipcar, the app-based vehicle rental service that customers to access its cars from the street. The company caused shock 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, that collects excess produce from grocery stores, cafes and restaurants. Other options are further away, costlier, or lack the same flexible hours.

“The impact will be massively,” stated Vimal Pandya, the community kitchen’s founder. “My team and I are worried about the operational hurdle we will face. Many groups like ours are going to struggle.”

“Knowing the reality, everyone is concerned and thinking: ‘How are we going to carry on?”

A Major Blow 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 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, subject to consultation with employees, is a big blow to hopes that vehicle clubs in cities could reduce the need for private vehicle ownership. However, some analysts also suggested that Zipcar’s exit need not spell the end for the idea in Britain.

The Potential of Car Sharing

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 as two-tonne dead weights on the side of the road for 95% of the time, using up space. They also require large CO2 output to produce, and people without a vehicle tend to use active travel and take public transport more. That benefits cities – reducing congestion and pollution – and boosts people’s health through increased activity.

Understanding the Decline

The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered 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 “wider restructuring across our global operations, where we are taking deliberate steps to simplify processes, enhance profitability”.

Zipcar’s most recent accounts said revenues had fallen as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the economic squeeze, 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 much harder for the sector to succeed.

• Patchwork Policies: Across 33 boroughs, car-club operators face a patchwork of varying processes and prices that complicate operations.
• New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
• Parking Permit Disparity: 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.

“We should literally be charged 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

Other European countries offer examples 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 lags behind at 0.7.

“The evidence shows is that car sharing around the world, particularly on the continent, is expanding,” commented 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 a potential operator 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 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.

One company, 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. “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 many across London will be left without access.

For the volunteers in Rotherhithe, the coming weeks will be a rush to find a solution. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the prospects of shared mobility in the UK.