UK thinktank urges early tax on self-driving cars to offset job losses
The Centre for British Progress thinktank says the UK should tax self-driving vehicles now to curb congestion and cushion the impact on private hire drivers, while firm Wayve warns such a levy would punish innovators.
A British thinktank is urging the government to introduce taxes on self-driving vehicles now, before the technology becomes widespread, warning of rising congestion and threats to hundreds of thousands of jobs in the private hire sector.
Robotaxis only began operating on London's streets this month, but official projections suggest up to 40% of new cars sold could have self-driving capability by the mid-2030s. The Centre for British Progress, a non-partisan economic growth thinktank, says individual ownership of autonomous vehicles is likely to boost overall car use at the expense of public transport, worsening congestion.
A future revenue stream
The report argues an early charge could ease the transition and replace the roughly £27bn a year currently raised through fuel duty, which is expected to shrink as electric vehicles become dominant. The thinktank calculates that by 2050, a charge matched to the social cost of congestion — about 88p per mile — could generate £47bn annually. It points to research showing nearly half the mileage driven by Waymo's robotaxis in California happens without a passenger, since running an empty vehicle costs little without a driver to pay.
Report co-author David Lawrence said acting early, before a large constituency of AV owners emerges to resist charges, mirrors the approach taken with fuel duty, introduced in 1909 ahead of mass car ownership. He noted that even if revenue doesn't peak until 2050, the prospect can influence bond markets and fiscal headroom today.
Industry and union reaction
Wayve, a British firm developing self-driving technology and partnering with Uber in London, said a sector-specific tax at this early stage would undermine the government's growth agenda and penalise the UK's most promising innovators in a market it values globally at £700bn. The GMB union, representing taxi and private hire drivers, said a levy alone would not be enough and called for a government plan to reskill and redeploy the 417,000 drivers working in England, 121,000 of them in London. Ministers have described the robotaxi rollout as a transformative opportunity expected to create thousands of jobs and generate billions for the economy by 2035.
