Robotaxi Price War Threatens London’s Taxi Industry
- Addison Lee warns that tech giants could use subsidized fares to undercut traditional taxi operators.
- Autonomous ride-hailing services are expected to launch in London soon, with prices potentially 20% lower.
- Regulators are being urged to introduce minimum fares and licensing limits to protect existing drivers.
London’s cabbies could be priced out of the market unless regulators step in to curb “predatory pricing” from deep-pocketed tech giants, the boss of Addison Lee has warned.
Chief executive Liam Griffin said companies like Waymo, Wayve, or Tesla risk undercutting traditional operators by subsidising fares to win market share, echoing concerns from the early days of Uber’s expansion.
“We do feel that there is a danger that the big players can come in and ride roughshod over the existing industry”, Griffin said.
He called for a minimum fare for robotaxi services and limits on operating licences.
The warning comes as London prepares to become a key battleground for autonomous vehicle firms, with Waymo, China’s Baidu, and Uber-backed partners all planning to launch in the UK once regulation allows for commercial deployment, expected from this year.
Griffin said regulators, including Transport for London (TfL), should consider measures similar to those already applied to black cabs, which operate with a minimum fare of £4.20.
“There are livelihoods on the line here”, he said, adding that without intervention, “a handful of players” could make it “unachievable” for existing operators to compete.
Regulatory approval
Analysts expect autonomous ride-hailing to become significantly cheaper over time, particularly as companies scale fleets and remove driver costs.
In China, early robotaxi services are already being heavily discounted to attract users, while forecasts suggest fares could fall by as much as 20 per cent, compared with human-driven services.
This model follows a familiar pattern, where subsidised pricing is used to gain dominance, which is then followed by consolidation.
But the difference in this scenario is the scale of capital behind the entrants, with firms like Waymo and Tesla having the financial backing to absorb losses far longer than traditional taxi operators.
The UK government has been actively encouraging the sector, estimating autonomous vehicles could add £42bn to the economy and create up to 40,000 jobs by 2035.
Pilot schemes are already underway, with vehicles mapping London streets ahead of commercial launches.
London’s taxi and private hire ecosystem, from black cabs to the likes of Addison Lee, has already been reshaped once by ride-hailing platforms.
Disruption ahead
The arrival of driverless fleets risks accelerating that disruption, particularly if pricing becomes the primary competitive lever.
There are also concerns that cheaper, more convenient robotaxis could draw passengers away from buses, cycling, and walking, potentially increasing traffic and undermining environmental goals.
At the same time, autonomous vehicles could improve safety by reducing human error and increasing efficiency by optimising routes.
Uber has struck partnerships with multiple robotaxi developers rather than backing a single provider, effectively positioning itself as a marketplace for an autonomous fleet, rather than a direct operator.
Griffin showed Addison Lee is likely to adopt a similar approach, suggesting future fleets could include vehicles from multiple autonomous providers, too.
“In the same way that we currently have Volkswagens, Mercedes and Audis in our fleet, I see the future being that we will have Pony.ai, Waymo and Wayve”, he said.
By City AM
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