A non-partisan thinktank in the UK has called for the government to implement taxes on self-driving vehicles, arguing that early action is necessary to manage the economic and social impacts of autonomous vehicle adoption. The first robotaxis began operating on London streets this month, with government forecasts suggesting that up to 40% of cars sold could feature self-driving capabilities by the middle of the next decade.
According to the thinktank’s analysis, widespread autonomous vehicle deployment would jeopardize hundreds of thousands of positions in the private hire and taxi sectors. The report also projects that individual ownership of self-driving cars would likely drive increased vehicle usage overall, potentially shifting demand away from public transportation and exacerbating traffic congestion. The analysis notes that autonomous vehicles operating without passengers—a common practice for the robotaxi service Waymo in California—have minimal operating costs compared to traditional vehicles requiring drivers.
The thinktank proposes that a tax scheme could serve dual purposes: easing the transition for workers while creating a new revenue stream to offset the disappearance of fuel duty, which currently generates approximately £27 billion annually. The report calculates that a tax set at approximately 88 pence per mile to account for congestion costs could raise £47 billion per year by 2050. The authors argue that implementing such measures now, before autonomous vehicles become widespread, is strategically important because it would avoid the political difficulties of introducing charges once a significant constituency of AV owners exists.
However, the proposal faces opposition from the autonomous vehicle industry. Wayve, a British technology firm developing autonomous vehicles, contends that sector-specific taxation at this early stage would penalize domestic innovators and contradict the government’s growth agenda. The company emphasizes that autonomous vehicles represent a major economic opportunity, with the global market projected at £700 billion. A drivers’ union representing taxi and private hire workers, while supporting an AV charge as a partial mitigation, has called for more comprehensive government support, including reskilling and redeployment programs for affected workers. The government has previously characterized autonomous vehicle technology as a transformative opportunity for the British economy.
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