After years of being sidelined by Japan’s laws against ride-sharing services, Uber Technologies Inc won government approval for a taxi-hailing pilot program in Japan.
Starting this summer, Uber is to connect local drivers and passengers in Awaji, a remote island that is home to 120,000 people and a dozen taxi companies, the company said in a statement yesterday.
The pilot, which is to last through March next year, is a minor victory for Uber, which has adhered to local rules since debuting in Japan five years ago.
Uber mainly operates as a car-hailing service in Tokyo and has not sought to disrupt the country’s ¥1.72 trillion (US$15.5 billion) taxi industry.
Japanese Prime Minister Shinzo Abe’s administration is seeking to use Uber’s technology to promote tourism on Awaji.
It is a chance for the start-up to raise awareness of its services by operating as a taxi dispatcher and possibly expand into bigger markets in the archipelago.
“As we join forces with local taxi companies and the Awaji district administration office, we will work together to enrich the product offerings of what will be the first initiative of its kind in Japan to meet the local needs,” Uber chief international business officer Brooks Entwistle said in the statement.
Uber did not disclose financial details or partners.
Awaji Island’s taxi companies collectively oversee a fleet of a few hundred cabs, the San Francisco-based company said.
The pilot program is the first initiative following Uber CEO Dara Khosrowshahi’s visit to Japan in February, when he outlined a new strategy of forging partnerships with taxi companies.
Nihon Kotsu Co and Sony Corp have also released or are working on rival taxi-hailing apps, although it is more challenging to make money solely as a dispatch service rather than taking commissions on fares.
China’s Didi Chuxing (滴滴出行) is also looking to offer taxi-hailing services in Japan and has been in talks with cab company Daiichi Koutsu Sangyo Co.
Awaji Island is located in the Seto Inland Sea, between the bigger islands of Honshu and Shikoku. It is home to one of the world’s longest suspension bridges and is a popular biking destination.
About 12.8 million people visited the island in the 12 months ended March, government data showed.
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