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A community kitchen in Rotherhithe has distributed a large number of prepared dishes each week for the past two years to elderly residents and vulnerable locals in south London. However, their operations have been thrown into disarray by the announcement that they will not have cars and vans on New Year’s Day.

The group depended on Zipcar, the app-based vehicle rental service that allowed its cars via smartphone. The company caused shock through the capital when it said it would shut down its UK business from 1 January.

It will mean many helpers cannot pick up supplies from a major food charity, which gathers surplus food from grocery stores, cafes and restaurants. Other options are further away, costlier, or lack the same flexible hours.

“It’s going to be affected massively,” said Vimal Pandya, the project's founder. “My team and I are worried about the operational hurdle we will face. Many groups like ours will face difficulties.”

“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 part of 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. Most of those people were likely with Zipcar, which held a dominant position in the city.

This shutdown, pending consultation with staff, is a big blow to hopes that car sharing in urban areas could reduce the need for owning a car. However, some experts also suggested that Zipcar’s exit need not mean the demise for the concept in Britain.

The Potential of Car Sharing

Car sharing is valued by city planners and green advocates as a way of mitigating the problems associated with vehicle ownership. Typically, vehicles sit idle on the side of the road for the vast majority of the time, using up space. They also involve large carbon emissions to produce, and people without a vehicle tend to use active travel and take transit more. That benefits cities – easing congestion and pollution – and improves people’s health through increased activity.

What Went Wrong?

The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its parent company's overall annual revenue, and a loss that reached £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 targeted actions to simplify processes, enhance profitability”.

Zipcar’s most recent accounts said revenues had declined 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.

London's Unique Hurdles

However, industry observers noted that London has particular issues that made it much harder for the sector to succeed.

• Inconsistent Rules: Across 33 boroughs, car-club operators face a mosaic of varying processes and prices that complicate operations.
• Congestion Charge: The closure comes as electric cars start paying London’s congestion charge, adding extra expenses.
• Unequal Parking Fees: 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 private parking cost,” 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 shared mobility laws in 2017, providing a unified system for parking, subsidies and exemptions. 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 shared mobility around the world, especially in Europe, is growing,” said Bharath Devanathan of Invers.

He suggested authorities should start to view vehicle clubs as a form of public transport, and link 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.”

What Comes Next?

The company’s competitors can roughly be divided 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. 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 peer-to-peer platform, is assessing the UK gap. Rory Brimmer, its UK managing director, 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.

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 Rotherhithe community kitchen, the next month will be a scramble to find a solution. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the future of car-sharing in the UK.