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The community kitchen in Rotherhithe has provided a large number of cooked meals each week for the past two years to elderly residents and needy locals in southeast London. Yet, the group's plans face major disruption by the news that they will not have access to 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 through the capital when it declared it would shut down its UK business from 1 January.

This means many helpers will be unable to pick up supplies from a major food charity, which gathers surplus food from grocery stores, cafes and restaurants. Obvious alternatives are further away, more expensive, 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 Significant Setback for City Vehicle Clubs

The community kitchen’s drivers are part of more than half a million people in London registered as car club members, who could be left without convenient access to vehicles, without the hassle and cost of ownership. Most of those people were likely with Zipcar, which had a near-monopoly position in the city.

This shutdown, pending consultation with staff, is a big blow to the vision that vehicle clubs in urban areas could cut the need for owning a car. However, some analysts have noted that Zipcar’s exit need not spell the end for the concept in Britain.

The Potential of Shared Mobility

Car sharing is prized by city planners and environmentalists as a way of reducing the problems associated with vehicle ownership. Most cars sit as two-tonne dead weights on the street 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 public transport more. That benefits cities – reducing congestion and pollution – and boosts 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 were minimal compared with its parent company's total earnings, 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 “broader transformation across our international business, where we are taking targeted actions to streamline operations, enhance profitability”.

Zipcar’s most recent accounts noted revenues had fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the economic squeeze, which is dampening demand for discretionary spending,” it said.

The Capital's Specific Hurdles

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

• Inconsistent Rules: With numerous local councils, 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: Residents 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 major disincentive.

“We should literally be charged one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We remove vehicles. We introduce cleaner models in their place.”

Lessons from Abroad

Other European countries offer examples for London to follow. Germany enacted national shared mobility laws in 2017, providing a nationwide framework 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, particularly on the continent, is expanding,” said Bharath Devanathan of Invers.

Devanathan said authorities should start to view vehicle clubs as a form of public transport, and integrate it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “Operators will fill this gap.”

What Comes Next?

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

1. Fleet Operators: Which maintain 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. 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. “There is a void 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. In the meantime, more people may feel forced to buy cars, and many across London will be without a convenient option.

For the volunteers in Rotherhithe, the next month will be a rush to find a way. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on vital services and the prospects of car-sharing in the UK.