Japan to allow limited rideshare services starting April 2024

Like Uber, but with drivers overseen by cab companies … for now

Japan will open its transport market to rideshare companies for the first time in 2024.

Leading rideshare operator Uber started operations in 2011 and kicked off competition with cabs in 2012, then entered many markets with a scofflaw attitude that saw it operate even though its services were not legal.

Uber tried to do that in Japan, but authorities wouldn't allow it to recruit drivers that weren't already licensed taxi operators. Uber's app therefore allows users to hail rides in Japan – but only in cabs. The restriction has meant the rideshare giant has struggled to grow.

That may start to change in April 2024, when Japan will allow rideshare operators to commence limited operations – with fares tied to those charged by taxis. And drivers – even those who drive their own cars – will be overseen by existing cab companies. Nor will Uber be allowed to offer its full service, unless it acquires a Japanese taxi operator.

The trial will also be limited to certain areas of Japan. One reason for the change is falling numbers of cab drivers, which is causing issues during a post-COVID influx of tourists, so acceptance of Uber and its peers is a way to address the shortfall.

News of the change was delivered at Japan's third Digital Administrative and Financial Reform Conference, at which plans were revealed to advance adoption of self-driving cars.

Also on the agenda is further improving government digital services, with initiatives including dashboards that report the progress of educational and health institutions.

Online marketplaces for government procurement are also planned, as are cloud services for the public sector.

Prime minister Fumio Kishida also pledged to "steadily review analog regulations" – yet another attempt to find and replace processes that rely on documents being physically stamped, or to address Japan's persistent fondness for faxes.

PM Kishida added his hope that by mid-2024 Japan will develop a law governing ridesharing that could result in the likes of Uber being allowed to operate their full services. That law will be informed by the results of the trial starting in April.

For what it's worth, Asia has not been a happy hunting ground for Uber. The US interloper struggled in both China and Singapore, where riders preferred local players DiDi and Grab. Rather than compete head-to-head, Uber acquired minority stakes in both outfits. ®

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