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The volunteer food project in Rotherhithe has distributed a large number of cooked meals weekly for the past two years to pensioners and needy locals in southeast London. Yet, the group's plans have been thrown into disarray by the news that they will lose access to New Year’s Day.

The group had relied on Zipcar, the app-based vehicle rental service that customers to access its cars via smartphone. The company caused shock across London when it declared it would shut down its UK business from 1 January.

It will mean many volunteers cannot collect food from the Felix Project, which gathers surplus food from supermarkets, cafes and restaurants. Other options are further away, costlier, or do not offer the same flexible hours.

“The impact will be massively,” stated Vimal Pandya, the project's founder. “My team and I are concerned by the operational hurdle we will face. A lot of people like ours will face difficulties.”

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

A Significant Setback 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, avoiding the burden 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 employees, is a big blow to hopes that vehicle clubs in urban areas could cut the need for private vehicle ownership. Yet, some analysts have noted that Zipcar’s departure need not mean the demise for the idea in Britain.

The Promise of Car Sharing

Car sharing is prized by city planners and environmentalists as a way of reducing the problems linked to vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for 95% of the time, occupying parking. They also involve large CO2 output to produce, and people without a vehicle tend to walk, cycle and take public transport more. That helps urban areas – easing congestion and pollution – and boosts public health through more exercise.

Understanding the Decline

The company started 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 overall annual revenue, 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 “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 fallen as drivers took less frequent, shorter trips. “These changes reflect the continuing effect of the cost-of-living crisis, which is dampening demand for non-essential services,” it said.

London's Unique Challenges

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

• Patchwork Policies: 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 start paying London’s congestion charge, adding extra expenses.
• Unequal Parking Fees: Locals 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’re putting less polluting cars in their place.”

A European Example

Nations in Europe offer models for London to follow. Germany enacted national shared mobility laws in 2017, providing a unified system for parking, subsidies 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.

“What we see is that car sharing around the world, particularly on the continent, is growing,” commented Bharath Devanathan of Invers.

He suggested authorities should start to treat car sharing as a form of mass transit, 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.”

The Future Landscape

Other players can be split into two camps:

1. Company-Owned Fleets: Which own or lease their own cars. This includes 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. 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. “There is a void 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. 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 scramble to find a way. The logistical challenge caused by Zipcar’s exit underscores the broader impact of its departure on community groups and the prospects of shared mobility in the UK.