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The volunteer food project in Rotherhithe has distributed hundreds of cooked meals each week for the past two years to pensioners and vulnerable locals in southeast London. Yet, the group's plans have been thrown into disarray by the announcement that they will not have access to New Year’s Day.

This organization depended on Zipcar, the car-sharing company that allowed its fleet of vehicles via smartphone. The company caused shock through the capital when it declared it would shut down its UK operations from 1 January.

It will mean many helpers cannot collect food from the Felix Project, that collects excess produce from supermarkets, cafes and restaurants. Obvious alternatives are less convenient, costlier, or do not offer the same convenient access.

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

“Faced with this 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, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those members were probably with Zipcar, which held a dominant position in the city.

This shutdown, pending consultation with employees, is a serious setback to the vision that car sharing in cities could reduce the need for owning a car. 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 environmentalists as a way of reducing the problems linked to vehicle ownership. Typically, vehicles sit idle on the side of the road for 95% of the time, using up space. They also require large carbon emissions to produce, and people who do not own cars tend to walk, cycle and take transit more. That benefits cities – reducing congestion and pollution – and improves people’s health through increased activity.

What Went Wrong?

Zipcar was founded in 2000 before its acquisition by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's overall annual revenue, 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 “wider restructuring across our global operations, where we are taking deliberate steps to simplify processes, improve returns”.

Zipcar’s most recent accounts said revenues had fallen 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 Hurdles

Yet, 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 patchwork of varying processes and costs that made it harder.
• Congestion Charge: The closure coincides with electric cars start paying London’s congestion charge, adding unavoidable costs.
• 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 per year, creating a significant barrier.

“We should literally be charged one-twentieth of a resident’s permit,” said 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 introduced national shared mobility laws in 2017, providing a unified system for parking, subsidies and exemptions. 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.

“What we see is that car sharing around the world, especially in Europe, is growing,” said Bharath Devanathan of Invers.

Devanathan said authorities should start to treat car sharing as a form of public transport, 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

Other players can roughly be divided into two camps:

1. Company-Owned Fleets: Which maintain 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 rent out their own vehicles via an app – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.

One company, a US-headquartered peer-to-peer platform, 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 some time 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 next month will be a scramble to find a solution. The logistical challenge caused by Zipcar’s exit highlights the broader impact of its departure on vital services and the future of car-sharing in the UK.