The community kitchen in Rotherhithe has distributed hundreds of prepared dishes each week for the past two years to pensioners and vulnerable locals in south London. Yet, the group's plans have been thrown into disarray by the news that they will not have cars and vans on New Year’s Day.
The group had relied on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles via smartphone. It caused shock through the capital when it declared it would cease its UK operations from 1 January.
It will mean many volunteers will be unable to collect food from the Felix Project, that collects excess produce from supermarkets, cafes and restaurants. Other options are less convenient, more expensive, or do not offer the same convenient access.
“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. A lot of people like ours are going to struggle.”
“Faced with this 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 over 500,000 people in London registered as car club members, who could be left without easy use to vehicles, without the hassle and cost of ownership. The vast majority of those members were probably with Zipcar, which held a dominant position in the city.
This shutdown, pending consultation with staff, is a big blow to the vision that car sharing in cities could reduce the need for private vehicle ownership. However, some analysts have noted that Zipcar’s departure need not spell the end for the concept in Britain.
The Potential of Car Sharing
Car sharing is prized by city planners and environmentalists as a way of reducing the ills associated with vehicle ownership. Most cars sit idle on the street 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 boosts people’s health through increased activity.
Understanding the Decline
The company started in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its parent company's total earnings, and a deficit that grew to £11.7m in 2024 gave no reason to continue.
The parent company stated the closure is part of a “broader transformation across our global operations, where we are taking deliberate steps to simplify processes, enhance profitability”.
Zipcar’s most recent accounts said 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 non-essential services,” it said.
The Capital's Specific Challenges
Yet, several experts noted that London has specific problems that made it much harder for the sector to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a patchwork of different procedures and costs that complicate operations.
- New Costs: 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 year’s electric car parking permit. A similar shared vehicle would pay over £1,100 annually, 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 introduce cleaner models in their place.”
Lessons from Abroad
Nations in Europe offer examples for London to follow. Germany enacted national car-sharing legislation in 2017, providing a nationwide framework for parking, support and waivers. 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 expanding,” said Bharath Devanathan of Invers.
He suggested 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: “Operators will fill this gap.”
What Comes Next?
The company’s competitors can be split into two models:
- Company-Owned Fleets: Which maintain their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Person-to-Person Rentals: Which allow users to hire out their own vehicles via an app – similar to Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.
Turo, a US-headquartered peer-to-peer platform, is already weighing up 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.
Yet, it could take some time for other players to establish themselves. For now, 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 solution. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of shared mobility in the UK.
