Uber Seals Its First Taxi Deal in Japan
(Bloomberg) -- Uber Technologies Inc. has finally found a partner for its cab-hailing program in Japan, one of the world’s largest taxi markets.
The San Francisco-based company struck a deal with the Fuji Taxi Group to let users hail cabs through its app in Nagoya, Japan’s third-most populous city. Uber gets an unspecified cut of all fares, which will be based on standard rates required by regulators. Their agreement initially covers more than 350 cabs, a big portion of the Nagoya-based operator’s fleet that amounts to about 5 percent of the city’s cabs.
The deal comes months after Uber boss Dara Khosrowshahi pivoted his Japan strategy toward partnering with taxi companies instead of fighting regulators who’ve outlawed ride-sharing. The agreement with Fuji Taxi, unveiled Thursday, will serve as a template for deals with other cab operators throughout the $16 billion Japanese taxi market.
“Once people see certain companies come on the platform and see us get jurisdictions, excitement builds, people want to join that and word gets out,” Brooks Entwistle, head of Uber in Asia, said in an interview ahead of the announcement. “That’s what we’re trying to get with momentum around that.’’
Uber has clashed with taxi operators and regulators worldwide, but in Japan it’s largely played by the rules since launching in Tokyo four years ago. With the country outlawing unlicensed ride-sharing, that’s relegated Uber to offering a high-end limousine service and the food-delivery business UberEATS.
The ride-hailing giant has been on the back foot in international markets since pulling out of China, Russia and Southeast Asia. Japan could offer a rare bright spot for its global business ahead of an initial public offering expected next year. Tourism is expected to surge and peak around the 2020 Olympic Games in Tokyo.
It isn’t the only technology company courting Japanese taxi companies. Chinese rival Didi Chuxing has been in discussions since last year with taxi operators about making it easier for tourists to hail cabs in Japan, while Sony Corp. unveiled an alliance with six taxi companies to develop a ride-hailing app that could cover more than 10,000 taxis in the greater Tokyo area.
From Thursday, Uber’s app will work in Nagoya pretty much the same way as elsewhere, except users will see taxis that they can order up on demand. Besides that deal, Uber has also begun experimenting with taxi-hailing on Awaji, an island in western Japan. It hasn’t disclosed the financial details of that pilot program, which involves about a dozen cab companies.
©2018 Bloomberg L.P.