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The volunteer food project in Rotherhithe has provided hundreds of cooked meals each week 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 not have use of New Year’s Day.

The group depended on Zipcar, the app-based vehicle rental service that customers to access its fleet of vehicles from the street. The company sent shockwaves across London when it said it would shut down its UK operations from 1 January.

This means many volunteers will be unable to pick up supplies from a major food charity, which gathers excess produce from grocery stores, cafes and restaurants. Other options are further away, more expensive, or lack 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. Many groups like ours are going to struggle.”

“Faced with this reality, they are all worried and thinking: ‘How will we continue?’”

A Major Blow for City Vehicle Clubs

These volunteers are part of over 500,000 people in London who were car club members, now potentially left without easy use to vehicles, without the hassle and cost of ownership. Most of those people were probably with Zipcar, which had a near-monopoly position in the city.

The planned closure, subject to consultation with employees, is a serious setback to the vision that vehicle clubs in urban areas could cut the need for owning a car. Yet, some analysts have noted that Zipcar’s exit need not spell the end for the idea in Britain.

The Promise of Car Sharing

Shared vehicle use is prized by city planners and environmentalists as a way of reducing the problems associated with vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for the vast majority of the time, using up space. They also involve large CO2 output to produce, and people who do not own cars tend to walk, cycle and take transit 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 American rental giant Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its parent company's overall annual revenue, and a loss 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 international business, where we are taking targeted actions to simplify processes, enhance profitability”.

Zipcar’s most recent accounts said revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the continuing effect of the economic squeeze, which continues to suppress demand for discretionary spending,” it said.

London's Unique Challenges

Yet, industry observers noted that London has particular issues that made it much harder for the sector to succeed.

• Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of varying processes and prices that complicate operations.
• New Costs: The closure coincides with electric cars start paying London’s congestion charge, adding extra expenses.
• Parking Permit Disparity: Locals in some boroughs pay just £63 for a annual electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a major disincentive.

“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

Nations in Europe offer examples for London to follow. Germany introduced national car-sharing legislation in 2017, providing a unified system for parking, subsidies 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 lags behind at 0.7.

“What we see is that car sharing around the world, especially in Europe, is expanding,” commented Bharath Devanathan of Invers.

Devanathan said authorities should start to view vehicle clubs as a form of public transport, and integrate 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 be split into two camps:

1. Company-Owned Fleets: 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 hire out their own vehicles via an app – similar to Airbnb for cars. Examples 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.

Yet, it could take some time for other players to build momentum. For now, more people may feel forced 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 solution. The delivery problem caused by Zipcar’s exit underscores the broader impact of its departure on vital services and the future of shared mobility in the UK.