Japan Warms Up to Ride-Hailing

Japan’s strict taxi rules have historically made it impossible for ride-hailing companies like Uber to crack the Land of the Rising Sun.

(Photo by Derch on Unsplash)
(Photo by Derch on Unsplash)

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Japanese taxi drivers may have to take off their white gloves.

The country’s strict taxi rules have historically made it impossible for ride-hailing companies like Uber to crack the Land of the Rising Sun, but Prime Minister Fumio Kishida hinted in a speech on Monday that legalizing the service could be on the table. Tokyo’s famously placid street scene may never be the same.

Tokyo Policy Drift

Uber isn’t completely banned in Japan, but the country’s laws about who can drive a taxi fundamentally undercut the ride-hailing business model. For Uber to scale into a market, it relies on being able to sign up drivers quickly and with as little friction as possible. In Japan, however, anyone giving other people rides for money needs a special taxi driver’s license, which requires passing a test. We’re not sure what the test entails, but we’re guessing it involves more than standing in front of a mirror and showcasing your best: “You talkin’ to me?”

These aren’t the first rumblings of Japan’s government easing its stance on ride-hailing, as a flagging economy and a shortage of taxi drivers take their toll:

  • Japanese Digital Transformation Minister Taro Kono told Nikkei Asia last month that the government would think about letting ride-hailing companies out of the stable in places and at hours where regulated taxis are hard to come by.
  • Numbers from the Japan Federation of Hire-Taxi Associations as reported by Bloomberg show that the number of taxi drivers in the country has dropped by 20% since 2019.

Prime Minister Kishida’s approval rating is at an all-time low, and the announcement that ride-hailing could become a reality was accompanied by promises to give Japan’s economy a jolt by taking “unprecedented bold steps.” Of course, it’s all still very wooly as to under what circumstances Uber and friends might be allowed to enter the market, and the company hasn’t often responded cheerfully to stipulations over how to manage its drivers.

No Pushover: While the ride-hailing apps get ready to break out the 25-year-old Yamazaki whiskey, it’s not all fun and games for foreign tech companies in Japan. The country’s antitrust regulator announced on Monday it’s launching an investigation into Google. Specifically, regulators are looking at whether it abused its dominance in the smartphone market to give Google Search preferential treatment — something the US Department of Justice has long been trying to prove also happens 6,000 miles across the Pacific.