Sadiq Khan’s proposed Congestion Charge hikes risk causing severe financial threats to thousands of drivers, with expenses potentially exceeding £1million annually.
Drivers who use car clubs have been warned of huge cost rises if the Congestion Charge increases from £15 to £18.
Collaborative Mobility UK has cautioned that the proposed modifications could compel car club companies to raise customer fees, shrink their vehicle fleets, and reduce the number of electric vehicles they operate, ultimately endangering the sector's survival in the capital.
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The charity has now urged authorities to distinguish between shared vehicles and privately owned cars in the charging structure.
Car clubs have slammed Sadiq Khan's Congestion Charge plans
|COLLABORATIVE MOBILITY UK/PA
The need for the difference comes after reports revealed that car-sharing schemes have demonstrated their ability to reduce overall vehicle numbers on roads as well as offer affordable access to transport.
Changes to the Congestion Charge are set to take effect on January 2, 2026, representing a 20 per cent rise in fees for drivers. Simultaneously, the complete exemption currently enjoyed by electric vehicles will be slashed to just a 25 per cent discount.
Now, a London-based car club has calculated that these two measures alone will impose costs of approximately £878,000 over the subsequent five years. This comprises £305,000 resulting from the increased charge and £573,000 from the removal of the full EV exemption.
The financial burden intensifies further when the electric vehicle discount drops to 12.5 per cent in 2030, pushing yearly expenses beyond £1million.
Car club operators have warned that the upcoming Congestion Charge hike will impact electric vehicles
|COLLABORATIVE MOBILITY UK
Additionally, the 90 per cent reduction available to residents within the charging zone will be restricted to electric vehicles from March 1, 2027, though existing registered residents will retain an exemption.
Car-sharing organisations have cautioned that the modifications will likely result in higher charges being passed on to members, potentially pricing out users.
Meanwhile, the removal of the complete electric vehicle exemptions from December 25 will also substantially reduce Londoners' access to environmentally friendly vehicles.
Richard Dilks, chief executive of CoMoUK, stated: "Car clubs are making a big contribution to reducing car ownership and mileage in London, with members more likely to embrace active travel and public transport too."
He emphasised that, "each car club vehicle replaces 31 private cars in the capital, freeing up space, cutting congestion and improving air quality." Mr Dilks described it as "utterly baffling if car clubs were treated as private cars under these changes."
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Leading car-sharing companies have voiced strong opposition to the proposals, highlighting the threat to their operations and London's transport ecosystem.
James Taylor, general manager at Zipcar, said: "Car clubs are a proven congestion-reducing measure; they provide a vehicle when Londoners need one, reducing the need for private car ownership."
He questioned the logic of the proposals, stating that if a car has to be driven into the congestion zone, "it is better for this to be a shared and electric one."
Marc Roberts, chief technology officer at Hiyacar, warned: "Car clubs already operate on razor-thin margins while delivering clear environmental and social benefits to London. These proposed Congestion Charge changes risk pushing already strained operators past the tipping point."
Electric vehicle owners will have to pay the Congestion Charge from December 25, 2025 | PAEnterprise Car Club's commercial director, Dan Gursel, and Co Wheels' head of mobility, Richard Falconer, echoed these concerns, with Mr Falconer noting the charges create additional barriers for operators seeking to enter the London market.
The organisation has also demanded that shared vehicles stationed within the charging zone receive complete residents' discounts, cautioning that without such measures, car clubs could become financially unsustainable.
Oliver Lord from the Clean Cities Campaign noted that: "London is missing out, trailing well behind major cities such as Paris, Rome and Berlin" in supporting electric car clubs.
The London Assembly's Transport Committee previously criticised TfL's absence of a comprehensive car club strategy, recommending urgent action, including mayoral recognition in the London Plan and a dedicated action plan within 12 months.