Self-driving cars should be taxed to offset job losses, thinktank urges

Taxes on Self-driving cars should be introduced now in the UK to offset the rise in Congestion and threats to jobs they pose, a thinktank has urged.The first robotaxis on London’s streets only started this month, but government projections are that up to 40% of cars sold could have self-driving capability by the middle of the next decade.The report says widespread autonomous vehicle (AV) adoption would put hundreds of thousands of private hire jobs at risk, while individual ownership is likely to increase car usage at the expense of public transport, and increase Congestion.Introducing charges now on self-driving vehicles could ease the transition and provide a future revenue stream to replace dwindling Fuel duty, according to the report from Centre for British Progress, a non-partisan thinktank focused on economic growth.Wayve, a British tech firm pioneering autonomous cars, said it would “penalise the UK’s most promising innovators”.About £27bn a year is brought in by Fuel duty, which is projected to disappear with the transition to electric vehicles.While the report acknowledges potential benefits in safety and different skilled jobs in the sector, it said ministers should act early to mitigate the effects on England’s 417,000 taxi and private hire drivers, (121,000 in London), as “self-driving vehicles will eventually make much of this work obsolete”.It notes that almost half of the mileage covered by Waymo’s robotaxis in California occurs with no passenger on board, that the costs of an empty vehicle are minimal without a driver to pay – and that driving around is potentially cheaper than parking.According to the Department for Transport forecasts, highly automated driving will bring a 24% rise in road miles by 2050, with significant effects on Congestion and road speeds.Taxes should be implemented now before AVs become commonplace, the report urges. It states: “There is not yet a substantial constituency of AV owners who will resist a charge; once there is, taxing them becomes far harder.”The thinktank calculates that by 2050, an AV charge set to match the social cost of Congestion – about 88p per mile – would raise £47bn per year.David Lawrence, one of the authors of the report, said that the experience of Fuel duty, introduced in 1909 before mass car adoption, showed it was best to build up before “a political fight later on – our view is that now is the time to do it”.He added: “In terms of the way that bond markets behave, even if tax revenue doesn’t peak until 2050, that’s still going to affect your 30-year bond yields today, which obviously is something the government is having to deal with. It can have an immediate impact on fiscal headroom, even if the actual revenue doesn’t come until much further down the line.”Ministers have backed the introduction of AVs as a “transformative opportunity” for UK, heralding the start of robotaxi services in London this year as bringing “cutting-edge technology to British roads, creating thousands of jobs and unlocking billions for the economy by 2035”.Uber, partnering with Wayve, has started limited AV services in the capital, with Google’s Waymo and the Chinese firm Baidu vying to join. Robotaxis already operate in the US, China and the UAE, and Europe’s first fully driverless taxi trials started in Zagreb, Croatia, this week.Sarah Gates, VP global affairs and assurance at Wayve, said AVs were “a major growth opportunity for the UK – an industry in which we hold a genuine competitive advantage” and would bring high-value jobs and corporation tax revenues from a share of a £700bn global market.She added: “A sector-specific tax at this early stage would undermine the government’s growth agenda and send precisely the wrong signal: that the UK will penalise its most promising innovators, rather than give them the conditions to scale and succeed.”The GMB union, which represents taxi and private hire drivers, said a tax on AVs would not go far enough. Simon Rush, president of the GMB London region drivers branch, said: “Driverless cars threaten the livelihoods of private hire drivers and the businesses that depend on them. GMB has asked the government, TfL (Transport for London), and operators for a plan to reskill and redeploy drivers, but to date our questions have gone unanswered.“An AV charge could go some way to mitigating the economic disruption caused by the rollout of these vehicles, but we need more.”Uber declined to comment.