Faring badly: Uber struggles to make inroads in Japan

Uber may be shredding business models for taxi firms the world over but it is struggling to make inroads in Japan.

There are 50,000 taxis in Tokyo alone, instantly recognisable with their impeccable polished exteriors and doors that open automatically.

There has been a 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 in 1928.

Given this, “when Uber tried to messily enter the market, no one wanted them”, Kawanabe said.

Uber also ran up against local legislation — it is forbidden to operate a taxi without a licence.

So it tried to enter the Japanese market by setting up a pilot carsharing service in 2015 in the city of Fukuoka.

Uber said it was a study into the needs of the local community but authorities slammed on the brakes, saying it could be considered an unlicensed taxi service.

Kawanabe also pointed to safety issues as being among the reasons Uber had not enjoyed the same success in Japan as it has elsewhere.

“When an accident happens, they don’t take responsibility and say they are just a platform provider.”

Uber has started another pilot system in two rural towns connecting senior citizens with people willing to drive them around. This time the authorities have not clamped down as it compensates for a lack of public transport in the areas.

Japan is also a “very important” market for UberEATS, its take-away food delivery service, the spokesman said.

Kawanabe, 47, known as the “prince of taxis”, admitted Uber had been useful in foisting change on the conservative Japanese taxi industry.

Around nine out of every 10 cab rides in Tokyo are hailed or taken from a rank, with only 10 per cent ordered via smartphone, said Kawanabe. The main reason for this is that fewer than half of the taxis in Tokyo are connected to a smartphone, he said.

“They still use old feature phones instead of smartphones,” he complained.

In addition, 80 per cent of taxi fares are paid in cash.

This conservatism — combined with excellent public transport systems — led to a decline of one third in taxi passengers between 2005 and 2015, according to the transport ministry. — AFP

Etienne Balmer