Taxi! Companies line up to overhaul Japan’s cab sector
Tokyo, Feb. 25: With their white- gloved, greying drivers and lace- covered seating, Japan’s taxis seem to belong to another era, but as the 2020 Olympics approach, the sedate sector is facing a quiet revolution.
This week, Uber’s CEO Dara Khosrowshahi made his first visit to Japan since taking over at the firm, touting “promising partnership talks” on his Twitter feed, where he posted smiling photos of himself alongside Prime Minister Shinzo Abe and Toyota chief Akio Toyoda.
The global ride- hailing giant has had little success so far penetrating Japan’s taxi market, which is governed by strict regulations.
But instead of pursuing the aggressive strategies it has used elsewhere, the company is opting for a charm offensive, emphasising cooperation rather than confrontation.
“Clearly we need a different way of doing business in Japan,” Khosrowshahi said at an event in Tokyo covered by local media.
“We need to come in with partnership in mind, and in particular a partnership with the taxi industry here, which actually has a very, very strong product,” he added.
“But that product hasn’t kept up with technological change”.
Japan’s taxi companies have seen little reason until now to innovate, shunning the upheaval seen across the industry elsewhere in the world.
Hailing a taxi rarely takes more than a few seconds in major Japanese cities, with the vast majority hired from cab ranks.
But with major sporting events — the Rugby World Cup next year and the 2020 Olympics — expected to bring in an unprecedented number of tourists, companies including Uber think the time is right for a taxi revolution.
“We know that the first thing many people do when they arrive in a country is open the Uber app. Our vision is for visitors to Japan to get a taxi via the app, with no language issues,” Uber spokesman Chris Brummitt said.
For now, the company has a limited presence in Japan with its premium service UberBLACK, but finding a local partner could change that.
“We believe there is immense potential to reach more customers by partnering,” Brummitt said.
Uber is far from alone in targeting the market, with Chinese ride- hailing giant Didi Chuxing and Japanese telecom firm SoftBank announcing a deal in early February to develop a taxi app in Japan.
SoftBank owns a 15 percent stake in Uber, but appears to be hedging its bets.
◗ Hailing a taxi rarely takes more than a few seconds in major Japanese cities, with the vast majority hired from cab ranks. But with sporting events — the Rugby World Cup next year and the 2020 Olympics — expected to bring in an unprecedented number of tourists, companies including Uber think the time is right for a taxi revolution.
And as outsiders line up to tap the sector, Japan’s taxi companies are also springing into action, seeking to tackle a decline in rider figures, which fell by a third between 2005 and 2015.
“The Japanese taxi industry has been protected by regulation for a long time. However recently more attractive, customer- oriented services have appeared,” said Hitoshi Kaise, an automotive expert at Roland Berger, a consulting firm.
Tokyo’s leading taxi company Nihon Kotsu, whose slogan is “unchanging sincerity in this ever- changing society”, recently began testing a ride- sharing app.
“We’re trying to make it easier to hail a taxi with reasonable fares,” said Ryota Fujimura, a spokesman for JapanTaxi, in charge of the project.