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In Japan, Uber dons white gloves to battle an elegant rival

Tim Hornyak | July 2, 2015
Get in a taxi in Tokyo, and you'll get a ride with a little old-world charm.

But so far it hasn't managed to expand beyond the capital, where it currently has only around 50 cars, according to several Uber drivers. Its Everyone's Uber pilot project in the southern city of Fukuoka, aimed at gathering data on transport patterns, was shut down by Japanese authorities earlier this year because it allegedly broke local laws.

Uber's Tokyo fleet is small for one of the largest cities in the world, and the app often indicates that no cars are available, even around hubs like Tokyo Station. Uber did not respond to a request for more information about its operations in Japan.

Uber has one advantage, in that its cars can be especially in demand at night, when regular taxis impose a 20 percent night surcharge. For about the same price, users can travel in an Uber luxury sedan. And unlike Uber, Japanese taxis can also charge booking fees when summoned to a location as well as fees for using highways.

Uber isn't the only ride hailing app trying to break into Japan. In January, Japan's dominant messaging app Line launched a ride-hailing service that works with Tokyo cab company Nihon Kotsu and other partners. It's being pitched as a way to get a cab when they're hard to find, and it works with cashless payment using Line's mobile payment function.

Hailing a cab from a chat app that's nearly ubiquitous in Japan is a major advantage, and a Line spokeswoman said the company plans to roll out the cab-calling function in Taiwan, where Line also has the top share for messaging. Users still have to pay the standard taxi fee for calling a cab, however.

Founded in London, taxi app Hailo has grown far slower than Uber -- even in Japan, where it's able to hook up users with about 600 of the roughly 8,000 cabs in Osaka. It's currently running a pilot project in that city but wants to expand to Tokyo based on the fact that its app can work with various taxi companies instead of just one fleet, and it has an international app. Like Uber, it has a rating system.

"Drivers and users can rate each other, so you'll always get a nice driver," said Ryo Umezawa, CEO of Hailo Japan, adding that this can address security concerns that women have felt when using cabs flagged in the traditional way. "Drivers, meanwhile, know right away that their sales are going up."

A number of taxi companies in Japan have launched their own ride-hailing apps. These programs may be extending the taxi market in Japan to new types of riders.

"While business people were some of the main taxi users in the past, apps are increasing the number of individuals who ride in taxis," said a spokesman for Nikko Data Service, which has developed a nationwide e-hailing app that works with about 130 companies and some 23,700 cars.

 

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