Japan Introduces Ride-Sharing to Tackle Taxi Shortages

Japan has taken a significant step towards modernizing its transportation system by introducing its first ride-sharing service in Tokyo on April 8, 2024. This move aims to address the recurring issue of taxi shortages, particularly during peak hours.

Unlike popular ride-sharing services in other countries, such as Uber and Lyft, Japan’s approach is unique, focusing on safety and regulation.

How Japan’s Ride-Sharing System Works

Under the Japanese ride-sharing system, drivers are hired by taxi companies and receive training in transporting passengers and work management. The service operates only in designated areas and during specific times when there is a need for additional taxis.

Customers cannot hail a ride-sharing vehicle on the street like traditional taxis; instead, they must use a taxi dispatch app, such as “Go” or “S.Ride,” to request a ride.

Fares for ride-sharing services are set in advance and are comparable to those of app-hailed taxis. Payment is made using cashless methods when the car reaches its destination.

The transport ministry determines the number of ride-share vehicles in operation and allocates them to taxi companies based on the identified shortages in each business district.

Companies Operating Ride-Sharing Services

Several taxi companies and dispatch services have entered the ride-sharing market in Japan. One notable player is Nihon Kotsu, a major taxi company in Tokyo, which has received over 10,000 driver applications for ride-sharing services. The company’s president, Ichiro Kawanabe, also serves as the chief executive of the Japan Federation of Hire-Taxi Associations.

Other companies involved in the ride-sharing initiative include the Tokyo Hire-Taxi Association, Royal Limousine Inc., and Go Inc., which operates the “Go” taxi app. These companies work in partnership with the transport ministry to ensure the safety and efficiency of the ride-sharing system.

Uber’s Role in Japan

Uber, the global ride-sharing giant, has had a different experience in Japan compared to other countries. Due to Japan’s strict regulations on ride-sharing, Uber has primarily operated as a traditional taxi-hailing service in Tokyo, connecting passengers with licensed taxi drivers through its mobile app.

However, with the introduction of the new ride-sharing system, Uber Japan plans to sign partnerships with about 10 taxi companies to start a ride-sharing service with several dozen cars.

The company has also reached out to its Uber Eats delivery workers, asking them to consider becoming ride-share drivers. Around 1,000 Uber Eats delivery workers have expressed interest in this opportunity.

Looking Ahead

Japan’s new ride-sharing system is expected to expand to other areas, including Kanagawa Prefecture, Aichi Prefecture, and Kyoto Prefecture, by the end of April 2024.

The transport ministry also plans to lift the ride-sharing ban in eight additional cities, such as Sapporo, Sendai, Saitama, Chiba, Osaka, Kobe, Hiroshima, and Fukuoka.

As Japan continues to embrace this new approach to transportation, it will be interesting to observe how ride-sharing services evolve and integrate with the existing taxi industry. The central government plans to hold discussions in June 2024 on whether to allow non-taxi companies to enter the ride-sharing market, potentially opening up new opportunities for both local and international players.

For Americans interested in Japanese culture, the introduction of ride-sharing services in Japan represents an exciting development that highlights the country’s commitment to innovation while preserving its focus on safety and regulation.