Japan's local governments hope new ride-hailing services will give economy a lift

YOKOHAMA (Kyodo) -- With a shortage of taxis leaving many of Japan's cities in a bind, local authorities hope a new central government rule that involves lifting a ban on ride-hailing services in populated areas could give the country's regions an economic boost, although questions remain about the scheme's viability.

Effective April 8, the new rule allows non-professional drivers to use their own private vehicles to transport passengers for a fee in the Tokyo metropolitan area and vicinities, the Keihin area centered on Yokohama, and Kyoto and Nagoya cities.

Provided they are under the management of a local taxi company, drivers can offer taxi services on specified days and hours. Operational details, such as the departure and arrival points as well as the fare, are pre-determined via dedicated apps for cashless payment.

In addition to the four approved zones, the transport ministry has greenlighted introducing the services to areas encompassing eight other cities -- Sapporo, Sendai, Saitama, Chiba, Osaka, Kobe, Hiroshima and Fukuoka -- as early as May.

A shortage of cabs and their scarcity during off-peak hours has become a serious enough problem across Japan that many other cities and towns, albeit on a much smaller scale, are willing to try and introduce ride-sharing services locally, although safety concerns linger.

One such city is Miura in Kanagawa Prefecture, near Tokyo, known as a "tuna town" for its fish markets that serve fresh seafood unloaded from the local port of Misaki.

The city of nearly 40,000 has two locally-based taxi companies, but one of them has had to stop offering its services after 7 p.m. to remain profitable. And with few taxis cruising the streets at night, residents complain that they often struggle to get a cab, even if they call up a taxi firm.

Under the current circumstances which include the fact that Miura is included in the Keihin area, where the ban was partially lifted this month, the city has been carrying out ride-hailing trials in cooperation with the prefectural government.

About a dozen drivers have been recruited for the eight-month trials, which have been named "Kana-ride" and are aimed at stress-testing the service using five or so cars for ride-hailing services between 7 p.m. and 1 a.m., to identify any additional requirements or potential problems before it is fully rolled out.

City officials and residents alike hope the initiative will stimulate the local economy.

"This will enable people to stay longer at bars and restaurants, which for their part can extend open hours, creating wider economic benefits," Miura mayor Hideo Yoshida said when the simulation details were announced earlier this month.

Takuya Yamada, 51, who works at a tuna restaurant near the Misaki port, said, "There should be demand from those who want to eat and drink longer or have to go to the hospital late at night. The drivers may also be able to introduce tourist spots to people."

But a question mark hangs over the city's plans from a business perspective. Mayor Yoshida has expressed concerns about whether or not ride-sharing services will be "commercially viable," and said the city will analyze the trial data properly.

In another case, the town office of Karuizawa signed deals in February with local entities including a local taxi association and an app provider in a step toward mitigating the chronic shortage of taxis at the popular mountain resort in Nagano Prefecture.

In front of Karuizawa Station, crowds of people that include tourists, people staying at villas, elderly residents and others must sometimes wait in line for at least an hour before they can get a cab after early evening on weekends and holidays.

The office is calling on retired officials, police officers and firefighters to become drivers because of their familiarity with the town's roads and their experience working in professions that the public has high levels of trust in.

It also wants to deploy a matching system that would mean cabs not being put to use when taxi company employees take leave could be driven by staff dispatched from other firms.

"A single policy can hardly meet a variety of demands. We would like to combine this with ride-hailing services such as the Karuizawa model," Michio Tsuchiya, mayor of the town, said.

Against the backdrop of an uptick in inbound tourism, the prefectural government is looking to address an increase in unlicensed taxis at and around Narita International Airport in Chiba Prefecture by conducting studies on how to make use of ride-hailing services.

"Means of transportation should be flexibly arranged to keep pace with social progress," Chiba Governor Toshihito Kumagai said.