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The community kitchen in Rotherhithe has been delivering hundreds of prepared dishes each week for the past two years to elderly residents and vulnerable locals in south London. Yet, the group's plans 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 car-sharing company that customers to access its cars from the street. The company sent shockwaves through the capital when it said it would cease 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 less convenient, 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 worried about the logistical challenge 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, without the hassle and cost of ownership. Most of those people were probably 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 owning a car. However, some experts also suggested that Zipcar’s exit need not spell the end for the concept in Britain.

The Promise of Car Sharing

Car sharing is prized by city planners and environmentalists as a way of reducing the ills linked to vehicle ownership. Most cars sit idle on the side of the road for 95% of the time, occupying parking. They also require large CO2 output to produce, and people who do not own cars tend to use active travel and take public transport more. That benefits cities – easing congestion and pollution – and improves people’s health through more exercise.

What Went Wrong?

The company started 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 loss 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 global operations, where we are taking deliberate steps to simplify processes, 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 economic squeeze, which is dampening demand for non-essential services,” it said.

The Capital's Specific Challenges

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

• Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of different procedures and prices that made it harder.
• New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
• 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,” said 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 introduced 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 lags behind at 0.7.

“The evidence shows is that car sharing around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers.

He suggested authorities should start to treat car sharing 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 roughly be divided into two models:

1. Fleet Operators: Which own or lease their own cars. Examples Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
2. Person-to-Person Rentals: Which allow users to hire 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 “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 build momentum. In the meantime, more people may feel forced to buy cars, and others across London will be left without access.

For Rotherhithe community kitchen, the coming weeks will be a scramble to find a solution. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the prospects of car-sharing in the UK.