Faring badly: Uber struggles to make inroads in Japan

TOKYO: Uber may be shredding business models for taxi firms the world over but it is struggling to make inroads in Japan, where risk-averse passengers prefer to stick to their high-quality traditional taxi service. Japan, with its wealthy customer base and megacities like Tokyo, should represent rich pickings for Uber. In 2015, the national market for taxis had a turnover of 1.73 trillion yen ($15.2 billion), according to transport ministry data.

There are 50,000 taxis in Tokyo alone-instantly recognisable with their impeccable polished exteriors and doors that open automatically to let valued customers board effortlessly.

And with hailing a taxi rarely taking more than a few seconds in the major cities, there has been sluggish take-up of Uber, where consumers order an unlicensed car via smartphone. “Japanese people don’t like taking risks, they are risk averse. They are quite strict when it comes to the quality of service,” said Ichiro Kawanabe, CEO of Nihon Kotsu, the main Tokyo taxi firm founded by his grandfather in 1928.

Given this, “when Uber tried to messily enter the market, no one wanted them”, Kawanabe, who is also chairman of the Japanese taxi federation, told AFP. Uber also ran up against local legislation — it is strictly forbidden to operate a taxi without a license. So it tried to enter the Japanese market via another route, setting up a pilot car-sharing service in 2015 in the western city of Fukuoka.

Uber said it was a study into the needs of the local community but authorities quickly slammed on the brakes, saying it could be considered an unlicensed taxi service and raising questions of safety. —AFP