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The volunteer food project 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 announcement that they will lose cars and vans on New Year’s Day.

This organization had relied on Zipcar, the app-based vehicle rental service that allowed its cars from the street. The company sent shockwaves through the capital when it said it would shut down its UK business from 1 January.

It will mean many volunteers will be unable to pick up supplies from a major food charity, which gathers excess produce from supermarkets, cafes and restaurants. Obvious alternatives are further away, costlier, or lack the same convenient access.

“The impact will be massively,” stated Vimal Pandya, the project's founder. “My team and I are worried about the logistical challenge 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 Significant Setback for Urban Car-Sharing

These volunteers are among more than half a million people in London registered as car club members, now potentially left without convenient access to vehicles, without the hassle and cost of ownership. The vast majority of those people were likely with Zipcar, which had a near-monopoly position in the city.

This shutdown, subject to consultation with staff, is a big blow to the vision that car sharing in urban areas could reduce the need for owning a car. However, some experts have noted that Zipcar’s exit need not mean the demise for the idea in Britain.

The Potential of Car Sharing

Shared vehicle use is valued by city planners and environmentalists as a way of mitigating the problems linked to vehicle ownership. Most cars sit idle on the side of the road for 95% of the time, using up space. They also require large CO2 output to produce, and people without a vehicle tend to walk, cycle and take transit more. That benefits cities – easing congestion and pollution – and improves public health through increased activity.

Understanding the Decline

Zipcar was founded in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income were minimal compared with its parent company's total earnings, and a deficit that reached £11.7m in 2024 gave little incentive 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, improve returns”.

Zipcar’s most recent accounts said revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the cost-of-living crisis, which continues to suppress demand for non-essential services,” it said.

The Capital's Specific Challenges

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

• Inconsistent Rules: Across 33 boroughs, car-club operators face a patchwork of different procedures and costs that complicate operations.
• Congestion Charge: 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 year’s electric car parking permit. A similar shared vehicle 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’re taking cars off the street. We’re putting less polluting cars in their place.”

A European Example

Other European countries offer examples for London to follow. Germany enacted national car-sharing legislation in 2017, providing a unified system for parking, support and waivers. Now, the country has several 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, particularly on the continent, is expanding,” said Bharath Devanathan of Invers.

Devanathan said authorities should start to treat car sharing as a form of public transport, and integrate 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.”

The Future Landscape

The company’s competitors can be split into two models:

1. Company-Owned Fleets: Which maintain their own cars. Examples 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 managing director, 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 some time for other players to build momentum. In the meantime, 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 way. The delivery problem caused by Zipcar’s exit underscores the wider implications of its departure on community groups and the future of shared mobility in the UK.