🔗 Share this article

A volunteer food project in Rotherhithe has distributed hundreds of prepared dishes weekly for two years to elderly residents and needy locals in south London. However, their operations have been thrown into disarray by the announcement that they will not have access to 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. It sent shockwaves across London when it declared it would shut down its UK business from 1 January.

This means many volunteers cannot collect food from the Felix Project, that collects excess produce from grocery stores, cafes and restaurants. Obvious alternatives are less convenient, 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 worried about the logistical challenge we will face. A lot of people like ours will face difficulties.”

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

A Major Blow for Urban Car-Sharing

These volunteers are part of over 500,000 people in London registered as car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those members were probably with Zipcar, which held a dominant position in the city.

The planned closure, subject to consultation with employees, is a big blow to the vision that car sharing in cities could cut the need for owning a car. However, some analysts have noted that Zipcar’s exit need not mean the demise for the concept in Britain.

The Potential of Shared Mobility

Shared vehicle use is prized by many urbanists and environmentalists as a way of mitigating the problems linked to vehicle ownership. Most cars sit as two-tonne dead weights on the street for 95% of the time, using up space. They also involve large carbon emissions to produce, and people without a vehicle tend to walk, cycle and take transit more. That benefits cities – reducing congestion and pollution – and boosts 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 income were minimal compared with its owner'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 global operations, where we are taking targeted actions to streamline operations, enhance profitability”.

Zipcar’s most recent accounts noted revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the ongoing impact of the economic squeeze, which is dampening demand for non-essential services,” it said.

London's Unique Hurdles

However, industry observers noted that London has particular issues 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 made it harder.
• New Costs: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
• 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 significant barrier.

“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.”

Lessons from Abroad

Nations in Europe offer examples for London to follow. Germany enacted national shared mobility laws in 2017, providing a unified system for parking, subsidies and exemptions. Now, the country has 5.4 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 shared mobility around the world, particularly on the continent, is expanding,” commented Bharath Devanathan of Invers.

He suggested authorities should start to view vehicle clubs 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 roughly be divided into two camps:

1. Fleet Operators: Which own or lease 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. Players include Britain’s Hiyacar and the US’s Getaround and Turo.

Turo, a US-headquartered peer-to-peer platform, is assessing the UK gap. Rory Brimmer, its UK head, 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 establish themselves. For now, more people may choose to buy cars, and others across London will be left without access.

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 community groups and the prospects of shared mobility in the UK.