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The community kitchen in Rotherhithe has distributed a large number of prepared dishes weekly for two years to pensioners and vulnerable locals in southeast London. However, their operations have been thrown into disarray by the news that they will not have cars and vans on New Year’s Day.

This organization depended on Zipcar, the app-based vehicle rental service that customers to access its cars from the street. It sent shockwaves across London when it said it would shut down its UK business from 1 January.

This means many helpers cannot pick up supplies from a major food charity, which gathers excess produce from supermarkets, cafes and restaurants. Other options are further away, costlier, or do not offer the same flexible hours.

“The impact will be massively,” said Vimal Pandya, the project's founder. “My team and I are concerned by the operational hurdle we will face. A lot of people like ours are going to struggle.”

“Faced with this reality, they are all worried and thinking: ‘How are we going to carry on?”

A Significant Setback for City Vehicle Clubs

These volunteers are among more than half a million people in London who were car club members, who could be left without convenient access to vehicles, without the hassle and cost of ownership. The vast majority of those people were likely with Zipcar, which held a dominant position in the city.

This shutdown, subject to consultation with employees, is a big blow to hopes that car sharing in urban areas could reduce the need for private vehicle ownership. Yet, some experts 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 valued by many urbanists and environmentalists as a way of reducing the problems associated with vehicle ownership. Typically, vehicles sit idle on the side of the road for 95% of the time, occupying parking. 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 – easing congestion and pollution – and boosts public 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 income were minimal compared with its owner's total earnings, and a deficit that reached £11.7m in 2024 gave little incentive to continue.

The parent company stated 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 said revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for discretionary spending,” it said.

The Capital's Specific Challenges

However, several experts noted that London has specific problems that made it much harder for the company and its rivals to succeed.

• Patchwork Policies: Across 33 boroughs, car-club operators face a patchwork of different procedures and costs that made it harder.
• New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding unavoidable costs.
• Parking Permit Disparity: Locals in some boroughs pay as little as £63 for a year’s electric car parking permit. A similar shared vehicle would pay over £1,100 annually, creating a major disincentive.

“We should literally be charged one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.”

A European Example

Nations in Europe offer models for London to follow. Germany enacted national car-sharing legislation in 2017, providing a unified system for parking, support 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.

“The evidence shows is that car sharing around the world, particularly on the continent, is growing,” 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 one unnamed client was already seriously considering entering the London market: “There will be fill this gap.”

The Future Landscape

Other players can be split into two camps:

1. Company-Owned Fleets: Which own or lease their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. Person-to-Person Rentals: 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.

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 choose to buy cars, and others across London will be without a convenient option.

For the volunteers in Rotherhithe, the next month will be a rush 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.