NAGOYA -- Uber Technologies launched a cab-hailing app in Japan on Thursday, aiming to expand its footprint in a country that bars its signature ride-sharing service.
The U.S. company is working with Nagoya-based Fuji Taxi Group, which has initially made 350 of its 550 taxis available on Uber's app.
Uber's popular ride-sharing platform that utilizes drivers' own cars is prohibited in Japan, so it had stalled in its efforts to establish a presence in the country.
But the company seeks to foster innovation in the taxi industry using its technologies, said Tom White, head of its Japan's mobility business, at a Thursday news conference here.
Since the fall of last year, Uber has shifted gears in order to cultivate the market for taxi-hailing services. Japan's taxi market, estimated at 1.7 trillion yen ($15.3 billion) is among the world's largest. With international visitors to the country increasing, hopes are growing that they will use taxis for transportation in greater Tokyo and elsewhere.
Earlier this year, Uber began a trial taxi-hailing operation in Hyogo Prefecture's Awaji Island, where local transportation options are limited. The Nagoya enterprise marks the start of the company's effort to build a nationwide service here, and it is in talks with more than 30 taxi businesses in various cities, according to an Uber official.
Sealing a deal with Fuji Taxi was no easy feat, however, because the system usage fee Uber had proposed was apparently higher than what an average taxi company could afford.
The competitive landscape in taxi-hailing services has undergone rapid changes of late. JapanTaxi, which offers a taxi-hailing mobile app, has garnered investments from Toyota Motor and mobile carrier NTT Docomo. Around 70,000 taxis -- a third of Japan's total fleet -- are available via the app, whose downloads have exceeded 5.5 million.
Meanwhile, Sony is partnering with five Japanese taxi companies including Kokusai Motorcars to offer a taxi-hailing system using artificial intelligence, slated to begin operations in fiscal 2018. And China's Didi Chuxing has formed a taxi-hailing venture with SoftBank Group.
Uber is also considering offering carpooling in taxis for people going to the same destination. Many observers are closely watching to see how large a foothold the company can establish in Japan.