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Business trends

Uber shortlists Japan for flying taxis

Project slated for 2023 launch presents new opportunity for auto industry

Uber COO Barnew Harford described Asia as an "incredibly important" market during the Uber Elevate Asia Pacific Expo in Tokyo on Aug. 30. (Photo by Ken Kobayashi)

TOKYO -- Uber Technologies said Thursday that Japan was among the five locations it is considering for the commercial launch of its flying-taxi project.

Commercial operations for Uber Air are scheduled to begin in 2023 in Dallas and Los Angeles, with demonstrations starting in 2020. The company is in the process of choosing a city outside the U.S. as a third location. 

The announcement was made at the Uber Elevate Asia Pacific Expo being held in the Japanese capital on Thursday. The other countries being considered are India, Australia, Brazil and France.

If Japan is selected, Tokyo would be a prime candidate. Access to Narita International Airport needs to be improved as the number of tourists visiting the city is predicted to rise substantially.

Uber is looking for a city with a need for innovative transportation solutions and sees air taxis as a potential option to supplement Tokyo's crowded rail and subway network. 

Air taxis are essentially outsize versions of aerial drones and most are capable of carrying four or five passengers. The use of drones for cargo delivery is in the initial testing phase.

The technology is being developed amid broader trends toward electrified and autonomous vehicles.

"It thrills me to think that the sight of flying cars crossing the sky will soon be a reality," said Tokyo Gov. Yuriko Koike at the event. "I truly look forward to this inspiring initiative, which will open up the future of urban transport."

Koike underlined the need for Tokyo to modernize its transport infrastructure in order to attract more people from Japan and abroad. "As Japan's population ages, its population has started to decline. In 2025, with the last of the postwar baby boomers reaching the age of 75, Tokyo's population is also expected to start falling," she said.

A chronic labor shortage is another issue facing the country. On Monday, a pilot project involving the world's first autonomous taxis on public roads was launched in the city. It is hoped that, one day, the technology can help deal with the lack of drivers -- a problem that is even more acute in rural areas.

The development of such vehicles also represents an opportunity for the country's auto industry. Demand for regular vehicles is expected to fall as the population ages and shrinks, and somewhat ironically, the growth of car sharing threatens to push down ownership rates.

On Tuesday, it was announced that Uber had expanded its partnership with Toyota Motor, receiving $500 million for the development of self-driving vehicles. The U.S. company has struggled in the aftermath of a fatal accident in March involving one of its driverless cars, and will look to tap Toyota's manufacturing expertise.

The partnership is also indicative of the blurring line between information technology and traditional industries.

"We realize that the automotive industry has been disrupted. Machine learning, artificial intelligence, communications, connected, intelligent cars are going to be the future, so we have to embrace the future and invest in it," said James Kuffner, CEO of Toyota Research Institute-Advanced Development.

Kuffner also pointed out that many areas of development were common to both autonomous vehicles and air taxis, including computer vision, artificial intelligence and analysis of vehicle dynamics.

"Toyota believes that the Toyota production system can be made to apply and add value to many types of electromechanical manufacturing needs, whether it's robotics, or aircraft," he said. The Toyota production system is optimized for car production right now, "but it's evolving and getting better and more flexible."  

For Uber, there is the issue of regaining access to a broader Asian market. In much of the region, rapid growth and a lack of transport infrastructure has exacerbated traffic congestion problems. However, Uber was forced to withdraw from Southeast Asia amid competition with local companies.

Tokyo Gov. Yuriko Koike spoke about the Japanese capital's need to develop transport infrastructure at the expo. (Photo by Ken Kobayashi)

"Uber's history is deeply tied to the Asia-Pacific region. It remains an incredibly important market for our present and future strategy," said Barney Harford, the company's chief operating officer.

Whichever country is chosen will still face numerous hurdles.

Landing pads will need to be built, pilots will need to be trained and service providers will have to be found. Moreover, no safety regulations exist at present and securing consent for the vehicles to operate will require buy-in from political leaders. 

"Smoothly incorporating rapidly advancing technologies and proactively implementing advanced initiatives will also lead to growth for Tokyo," Koike said.

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