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A volunteer food project in Rotherhithe has been delivering a large number of prepared dishes weekly for the past two years to elderly residents and needy locals in south London. However, their operations face major disruption by the announcement that they will not have cars and vans on New Year’s Day.

This organization had relied on Zipcar, the car-sharing company that customers to access its cars via smartphone. The company caused shock across London when it said it would cease its UK business from 1 January.

It will mean many helpers will be unable to pick up supplies from a major food charity, that collects excess produce from grocery stores, cafes and restaurants. Other options are further away, more expensive, 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 concerned by the operational hurdle we will face. Many groups like ours are going to struggle.”

“Faced with this reality, everyone is concerned and thinking: ‘How will we continue?’”

A Significant Setback for Urban Car-Sharing

These volunteers are part of more than half a million people in London who were car club members, now potentially left without easy use to vehicles, avoiding the burden and cost of ownership. The vast majority of those members 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 cut the need for owning a car. However, some experts have noted that Zipcar’s exit need not mean the demise for the concept in Britain.

The Promise of Shared Mobility

Car sharing is prized by many urbanists and environmentalists as a way of reducing the problems linked to vehicle ownership. Most cars sit idle on the street for 95% of the time, using up space. They also involve large carbon emissions to produce, and people who do not own cars tend to use active travel and take transit more. That helps urban areas – easing congestion and pollution – and improves public health through more exercise.

What Went Wrong?

Zipcar was founded in 2000 before being bought by the American rental giant Avis Budget in 2013. Zipcar’s UK revenues barely registered compared with its owner's total earnings, and a loss that grew to £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”.

Its latest financial reports noted revenues had fallen as drivers took fewer and shorter trips. “These changes reflect the continuing effect of the economic squeeze, which continues to suppress demand for discretionary spending,” it said.

London's Unique Challenges

However, several experts 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 patchwork of different procedures and prices that complicate operations.
• New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
• Unequal Parking Fees: Locals in some boroughs pay just £63 for a annual electric car parking permit. A floating car club would pay over £1,100 per year, creating a significant barrier.

“Our fees should be one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We introduce cleaner models in their place.”

A European Example

Other European countries offer models for London to follow. Germany introduced national car-sharing legislation in 2017, providing a nationwide framework 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.

“What we see is that shared mobility around the world, especially in Europe, is growing,” commented Bharath Devanathan of Invers.

Devanathan said authorities should start to treat car sharing as a form of mass transit, and link it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “Operators will fill this gap.”

The Future Landscape

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

1. Company-Owned Fleets: Which own or lease their own cars. Examples 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 – a kind of Airbnb for cars. Examples Britain’s Hiyacar and the US’s Getaround and Turo.

Turo, a US-headquartered P2P service, is already weighing up the UK gap. Rory Brimmer, its UK managing director, 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 some time for other players to build momentum. For now, more people may choose 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 way. The delivery problem caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the future of shared mobility in the UK.