London’s ultra-low emission zone (Ulez) and congestion charge should be scrapped in favour of a per-mile charging scheme based on the impact of vehicle journeys, according to a thinktank report backed by politicians and business groups in the capital.

Using digital platforms and a new app, users would be quoted a price before their journey, which would vary depending upon the vehicle emissions, levels of congestion and pollution, and what public transport was available.

The Centre for London said it would be a more sophisticated approach to road charging and reflect the true impact of each individual journey. Driving costs would be integrated with the wider transport system via a new app, which the thinktank proposed would be run by Transport for London, and show the alternatives.

While the report said the new ultra-low emission zone was a much-needed environmental measure, it said a single app-based system would be simpler and fairer and reduce pollution – a conclusion backed by the RAC Foundation. Its director Steve Gooding said: “No one would challenge the urgent need to tackle congestion and reduce emissions so the easier things are made for drivers to comply the quicker change will be accepted.”

Business group London First backed the proposal. Richard Dilks, transport director, said: “London paved the way for congestion charging 16 years ago and, as charging for road use becomes more commonplace in big cities across the world, we need to plan to stay one step ahead.”

Caroline Pidgeon, chair of the London Assembly transport committee said: “An intelligent use of our crowded roads must involve moving to a system of charging per mile for trips made in areas of high demand and poor air quality. We need a radical overhaul.”

A spokesperson for the mayor, Sadiq Khan, said that as set out in the mayor’s transport strategy, TfL would “continue to review how the latest technology can ensure existing and future charging schemes reflect the changing needs of our city, including how best to tackle congestion and air pollution”.