Ride-Sharing Struggles to Gain Traction in Japan Due to Fundamental Flaw

Only “part-time” recognition

In the fiscal year of 2024, when reflecting on transportation infrastructure, it may be remembered as a significant turning point, marking the inception of Japan’s version of ride-sharing under the leadership of taxi companies, offering a paid service for passengers using private vehicles.

However, over six months since its official launch in April, discussions and news about ride-sharing are beginning to taper off. So, why hasn’t ride-sharing fully integrated into Japanese society?

According to data released by the Ministry of Land, Infrastructure, Transport, and Tourism (MLIT) in November, there are 1,242 taxi companies participating, with 5,645 registered drivers in the 12 regions that were piloted. While the numbers suggest rapid growth, in reality, there are regions where zero service operations have been reported, highlighting significant challenges. One major reason for this slow integration is lingering concerns about safety.

The “All Japan Traffic and Transport Workers’ Union Council” conducted an online survey with 1,053 participants who use taxis at least once a month. About 62% of respondents expressed cautious views regarding the legal framework necessary for full-scale liberalization, emphasizing safety concerns. Specifically, nearly 90% voiced concerns about issues like compensation and negotiations during accidents and drivers engaging in indecent or voyeuristic behaviors.

Although no major incidents have been reported with Japan’s ride-sharing services, there remains a substantial segment of the population with latent fears.

The author interviewed multiple drivers working in ride-sharing. They noted that the current system resembles a “part-time job for taxi companies,” and that this perception hasn’t significantly changed over the past six months.

“Most users are foreign tourists who use ride-sharing apps like Uber from their home countries.”
“Japanese users primarily use it sporadically, often due to the app’s convenience, and the proportion is quite low.”
“Earnings are better than expected, but expenses like fuel costs are substantial.”
“Since the working hours are limited, it’s difficult to fully commit.”
“There’s a benefit to working during gaps in time, making it suited for self-employed or freelance workers.”
“Overall, the app remains active, with minimal wait times.”
“The uncertainty about long-term sustainability remains.”

These are some of the voices heard from the field. While ride-sharing is popular among foreign tourists, especially when comparing it to traditional taxis, it seems there is little reason for most Japanese to choose ride-sharing over conventional taxi services.

Also questioning the necessity.

Taxi operators have long maintained a firm stance against ride-sharing, and fundamentally, not much has changed. The All Japan Hire and Taxi Federation aims for a “one vehicle per company” model for Japan-style ride-sharing, but there remains a significant gap in perceptions. A senior executive from a Tokyo taxi company revealed, 

“It feels like a quota imposed from above. Currently, taxi operators see little benefit in adopting ride-sharing.”

Another crucial point worth noting is the crushing defeat of the ruling Liberal Democratic Party in the House of Representatives election, alongside a significant gain for the Constitutional Democratic Party. Both the LDP and Ishin no Kai, which were actively promoting ride-sharing, saw a reduction in seats.

While some members of the Constitutional Democratic Party have been advocating for ride-sharing legalization, their efforts are largely met with opposition from labor unions and other support bases. Consequently, the opposition-led Taxi Policy Diet Members Federation, consisting of 154 members, has reiterated its stance against ride-sharing. This indicates that the progression of ride-sharing legislation and the introduction of new laws are unlikely to accelerate.

One taxi business representative shared, 

“In light of the results of the House of Representatives election, the ride-sharing debate has been put on hold for now. For the time being, the focus will be on gradually integrating Japan’s version of ride-sharing. However, depending on the outcome of the 2025 summer Upper House election, there is a possibility of a sudden push for full legalization.”

The push for ride-sharing gained momentum around 2022 due to the growing concern over a shortage of taxis. While the number of taxi drivers in urban areas has been gradually recovering, efforts are being made to rejuvenate the workforce.

A pro-ride-sharing member of the Liberal Democratic Party expressed, 

“From a long-term perspective, the difficulty in securing taxi drivers will lead to mobility issues. To broaden access, it is essential to offer entirely different choices to workers.”

The question remains: Is ride-sharing truly necessary for Japanese society? With external factors like elections influencing the debate, the tug-of-war between proponents and opponents of ride-sharing seems set to continue.