🔗 Share this article

The community kitchen in Rotherhithe has been delivering a large number of prepared dishes weekly for the past two years to pensioners and needy locals in south London. However, the group's plans face major disruption by the news that they will lose cars and vans on New Year’s Day.

This organization depended on Zipcar, the car-sharing company 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.

It will mean many volunteers cannot collect food from the Felix Project, which gathers surplus food from supermarkets, cafes and restaurants. Obvious alternatives are further away, more expensive, or lack the same flexible hours.

“The impact will be massively,” stated 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.”

“Knowing the reality, they are all worried and thinking: ‘How are we going to carry on?”

A Major Blow for Urban Car-Sharing

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

The planned closure, subject to consultation with staff, is a big blow to the vision that car sharing in cities could cut the need for private vehicle ownership. Yet, some experts also suggested that Zipcar’s exit need not mean the demise for the idea in Britain.

The Potential of Shared Mobility

Shared vehicle use is valued by many urbanists and environmentalists as a way of reducing the problems linked to vehicle ownership. Most cars 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 use active travel and take public transport more. That helps urban areas – reducing congestion and pollution – and improves people’s health through more exercise.

Understanding the Decline

Zipcar was founded in 2000 before being bought 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 reached £11.7m in 2024 gave no reason to continue.

Avis Budget has said the closure is part of a “wider restructuring across our global operations, where we are taking deliberate steps to streamline operations, enhance profitability”.

Zipcar’s most recent accounts noted revenues had declined as drivers took fewer and shorter trips. “These changes reflect the ongoing impact of the cost-of-living crisis, which is dampening demand for discretionary spending,” it said.

The Capital's Specific Challenges

However, several experts noted that London has particular issues that made it difficult for the sector to succeed.

• Patchwork Policies: 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 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 significant barrier.

“We should literally be charged 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 models for London to follow. Germany enacted national car-sharing legislation in 2017, providing a nationwide framework 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 trails at 0.7.

“The evidence shows is that car sharing around the world, especially in Europe, is expanding,” 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 already seriously considering entering the London market: “Operators will fill this gap.”

The Future Landscape

Other players can be split 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. 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.

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. “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 build momentum. In the meantime, more people may choose to buy cars, and others across London will be left without access.

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 community groups and the future of car-sharing in the UK.