Uber’s planned takeover of British tech firm Autocab is to be investigated by the competition watchdog over concerns about its possible impact on the UK taxi market.

The Competition and Markets Authority (CMA) will examine whether the deal could result in a “substantial lessening of competition”.

Manchester-based Autocab provides private hire taxi operators across the world with software to run their business.

Ride-hailing giant Uber said in August that it had reached an agreement to acquire the company, saying the move would help it connect passengers with local drivers in areas it does not serve.

These locations include Oxford (an average of 67,000 app opens per month), Doncaster (24,000), Swansea (18,000) and Aberdeen (17,000).

As part of the deal, Uber pledged to keep Autocab independent, with its own staff and management.

“The CMA is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services,” the watchdog said.

The CMA is seeking comment from the industry until February 12.

An Uber spokeswoman said: “We are co-operating fully with the UK Competition and Markets Authority’s inquiry to ensure it can conclude its review as quickly as possible.

“We are confident that this acquisition is positive for consumers, will help local operators grow and provide drivers with genuine earning opportunities.”