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Ride-hailing businesses face bumpy road in Japan

Legislative hurdles high, taxi industry mounting fierce objections

In Japan, the Uber app is used to hail taxis, not cars driven by ordinary drivers.

TOKYO -- A government deregulation panel launched talks here Tuesday on lifting the ban on ride-hailing services, but Japan will likely remain one of the few major economies in the world that keeps Uber from widely running its core operations -- at least for a while longer.

"The issues with ride-sharing services can be resolved," an official from Notteco, a company offering a hitchhiking-type service, told the panel's Tuesday meeting, proposing rules such as a ceiling on driver pay and required membership for users.

Currently Notteco links up long-haul travelers -- such as those visiting their faraway hometowns or ski vacationers -- with drivers who have available seats in their cars. But using private cars to ferry people for money is illegal in Japan, so drivers can get paid only for the cost of gas and tolls. Rolling back this ban would require a legislative amendment, and Notteco is lobbying for such a change.

"A structure where the driver alone is responsible for transporting people is a problem in terms of ensuring safety and protecting users," Transport Minister Keiichi Ishii told reporters Tuesday. Lifting of the ban "requires extremely careful consideration," he added.

The taxi industry is also opposing deregulation. "The number of taxis in Japan could shrink by half," said Ichiro Kawanabe, president of Nihon Kotsu, Japan's leading taxi operator.

But the Tokyo-based company has an idea to enhance the convenience of its taxi service. Kawanabe, who attended Tuesday's government panel meeting, unveiled Nihon Kotsu's plans to launch a taxi-sharing service this year, possibly using a smartphone app to connect passengers going in the same direction.

Taxi companies are not too worried at this point about players like Notteco, whose services are virtually limited to longer-haul trips. But they feel threatened by the prospect of a service offering both long and short rides with any motorist acting as a taxi driver.

Remote areas with inadequate transportation infrastructure are the only places in Japan where personal cars can be used lawfully for carrying fare-paying passengers. But even this system requires prior consent of the taxi industry, and service regions are limited as well.


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