Uber Finally Catches a Break in Japan With Pilot Taxi Service

After years of being
sidelined
by Japan’s laws against ride-sharing,

Uber Technologies Inc.
won government approval for a taxi-hailing pilot program in Japan.

Starting this summer, Uber will connect local drivers and passengers in Awaji, a remote island that’s home to 120,000 people and a dozen taxi companies, the company said in a statement Tuesday.

An Uber vehicle awaits passengers in Kyoto, Japan.

Photographer: Yuji Nakamura/Bloomberg

The pilot, which will last through March, 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 hasn’t sought to disrupt the country’s 1.72 trillion yen ($15.5 billion) taxi industry. Prime Minister Shinzo Abe’s administration is seeking to use Uber’s technology to promote tourism on Awaji. It’s a chance for the startup 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,” Brooks Entwistle, Uber’s Chief International Business Officer, said in the statement.

Uber didn’t disclose financial details or partners. Awaji Island’s taxi companies collectively oversee a fleet of a few hundred cabs, according to the San Francisco-based company. The pilot program is the first initiative following Chief Executive Officer 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’s more challenging to make money solely as a dispatch service rather than taking commissions on fares. China’s Didi Chuxing 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’s 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 through March 2017, according to government data.

— With assistance by Yuki Furukawa

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