A British economic thinktank has recommended that the UK introduce taxes on autonomous vehicles in the near term to offset employment disruption and transportation challenges anticipated from their adoption. The recommendation comes as robotaxis began operating in London this month, with government forecasts suggesting that up to 40% of new cars sold could feature self-driving capabilities by mid-next decade.
The Centre for British Progress report identifies significant risks from widespread autonomous vehicle deployment, including potential job losses affecting hundreds of thousands of private hire drivers across the country. The analysis suggests that individual ownership of self-driving vehicles would likely increase overall car usage while diverting demand from public transportation systems, thereby worsening traffic congestion. The thinktank emphasizes that current revenue from fuel duty—approximately £27bn annually—faces elimination as the vehicle fleet transitions to electric power, creating a fiscal gap that autonomous vehicle taxation could help address.
The report calculates that implementing a congestion-based charge of approximately 88 pence per mile on autonomous vehicles could generate around £47bn yearly by 2050. Report authors argue that establishing such taxes now, before autonomous vehicles achieve mass adoption, would prove far more feasible than attempting to implement them later when a substantial constituency of vehicle owners would resist such measures. This approach mirrors the early implementation of fuel duty in 1909, before widespread car ownership made such taxation politically difficult.
The proposal has generated contrasting responses from industry stakeholders. Wayve, a British autonomous vehicle technology firm, contends that sector-specific taxation at this early stage would penalize domestic innovators and contradict the government’s growth objectives. Industry representatives highlight the competitive advantages held by British firms and the potential for high-value employment and corporation tax revenues from the emerging autonomous vehicle sector. Conversely, the GMB union, representing taxi and private hire drivers, argues that taxation alone proves insufficient and calls for comprehensive government programs to reskill and redeploy affected workers.
Currently, autonomous vehicle services operate in the United States, China, and the United Arab Emirates, with Europe’s first fully driverless taxi trials having commenced in Zagreb, Croatia, this week. UK government officials have characterized autonomous vehicle development as a “transformative opportunity” expected to create employment and generate substantial economic benefits.
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