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A community kitchen in Rotherhithe has been delivering hundreds of prepared dishes each week for 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 customers to access its cars from the street. The company caused shock through the capital when it declared it would shut down its UK operations from 1 January.

This means many volunteers 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, costlier, or lack the same convenient access.

“The impact will be massively,” said Vimal Pandya, the project'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.”

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

A Major Blow for Urban Car-Sharing

These volunteers are among over 500,000 people in London who were car club members, now potentially 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.

This shutdown, pending consultation with staff, is a serious setback to the vision that vehicle clubs in urban areas could reduce the need for owning a car. However, some experts have noted that Zipcar’s exit need not spell the end for the idea in Britain.

The Promise of Car Sharing

Shared vehicle use is valued by many urbanists and green advocates as a way of reducing the problems associated with vehicle ownership. Typically, vehicles sit as two-tonne dead weights on the street for 95% of the time, using up space. They also require large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take public transport more. That benefits cities – reducing congestion and pollution – and boosts people’s health through more exercise.

What Went Wrong?

Zipcar was founded in 2000 before being bought 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.

Avis Budget has said the closure is part of a “wider restructuring across our international business, where we are taking targeted actions to simplify processes, improve returns”.

Its latest financial reports noted 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 discretionary spending,” it said.

London's Unique Hurdles

Yet, several experts noted that London has particular issues that made it difficult for the company and its rivals to succeed.

• Patchwork Policies: With numerous local councils, 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.
• Parking Permit Disparity: Residents in some boroughs pay just £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 annually, creating a major disincentive.

“Our fees should be 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

Nations in Europe offer examples for London to follow. Germany introduced national car-sharing legislation 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 car sharing around the world, especially in Europe, is growing,” said Bharath Devanathan of Invers.

He suggested authorities should start to treat car sharing as a form of mass transit, and integrate 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

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

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 rent out their own vehicles via an app – similar to Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.

Turo, a US-headquartered peer-to-peer platform, is assessing the UK gap. Rory Brimmer, its UK head, said there was a “significant chance” 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 establish themselves. For now, more people may feel forced to buy cars, and others across London will be left without access.

For the volunteers in Rotherhithe, the coming weeks will be a rush to find a solution. 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.