Uber gears up for its latest scheme in the tricky Japanese market

tokyo driverless cabs 2020 taxi
Trevor Mogg

Uber has to do things a little differently in Japan. Tight regulations prohibit non-professional drivers from transporting passengers for money, so the ridesharing service and others like it have hardly any presence in one of the world’s most lucrative markets for transportation services.

A limited Uber offering in Tokyo is swamped by the capital’s tens of thousands of licensed taxis, each with its own neatly besuited driver — complete with spotless white gloves — in a car that features automatically opening doors.

Experimenting with different ways to increase its presence in the country while walking the regulatory tightrope, Uber struck a deal two years ago to offer car trips for senior citizens in several rural areas where taxis or other transportation services are in short supply. But as in the capital, the scale of the service is still small.

Moving forward, Uber is about to launch a new service that looks set to be its most significant expansion yet in the Asian nation, Reuters reports. Launching in the coming months on Awaji Island near the city of Osaka, Uber is linking its app to around 20 local taxi companies, offering rides to the island’s 150,000 inhabitants as part of a trial.

Uber Japan spokesperson Kay Hattori told Reuters that the company is now “concentrating on partnerships with taxi companies in the country,” adding, “We would like to expand this nationwide.”

With the country’s taxi regulations likely to stay firmly in place for the foreseeable future, the kind of ridesharing service familiar to many Americans still looks to be some way away for most of Japan’s citizens.

Competitors are still finding their way in the country, testing various formats to see which prove most effective while at the same time staying onside with local officials as well as Japan’s strong taxi lobby.

Uber faces tough competition from the established Line Taxi service, an offshoot of Japan’s most popular messaging app. Similar to Uber’s upcoming service in Awaji, Line Taxi has partnered with existing taxi firms to provide on-demand rides.

But that’s not all. China’s Didi Chuxing and Japan’s SoftBank have teamed up to launch a taxi-hailing service in Japan this year, as has Sony, which is developing an app that incorporates artificial intelligence smarts to help the service dispatch taxis to customers more efficiently.

Robust competitors in China, Russia, and south-east Asia have already forced Uber out of those markets. The pressure is now on to find a format that works in Japan.