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Uber seeks to expand operations in Japan

By Sean Mclain

Tokyo – Uber Technologies Inc., mostly blocked from operating its core ride-hailing service in Japan, is searching for alternate routes to profit in the world’s third-largest economy.

The company is trying to link up customers with licensed taxi drivers – instead of the private car owners it relies upon in the US Uber is using limited exemptions to operate a US-style service in rural areas that lack access to public transport. And on Thursday, the company brought its UberEats food-delivery service to parts of Tokyo.

MB File - Uber logo (Manila Bulletin)

MB File – Uber logo
(Manila Bulletin)

Those efforts are in lieu of what Uber would really like to do in Japan: offer urban dwellers a way to hail an inexpensive ride instead of a taxi. The San Francisco-based company, whose brand is largely unknown in Japan, thinks it can reach that destination eventually; in the meantime it aims to build a following with the other services.

“We have high hopes that Japan will become a big market for Uber,” said Masami Takahashi, president of Uber Japan.

Japan, a wealthy and densely populated nation, is in some respects the ideal location for Uber. And its importance has grown now that Uber has stopped competing on its own in China, the world’s second-largest economy after the US

Last month, Uber merged its China operations into Didi Chuxing Technology Co., the biggest China-based car-hailing service. The two had been waging an expensive battle for customers. At the time, Uber Chief Executive Travis Kalanick said the merger freed up cash “for bold initiatives focused on the future of cities – from self-driving technology to the future of food and logistics.”

Uber has been focusing on trimming losses and ramping up revenue ahead of an eventual public offering. Global expansion – not just in Japan but also in places like India and Southeast Asia – is a key part of the strategy.

Mr. Kalanick expressed frustration with Japan a few years ago, saying the country had “Byzantine and complicated regulations.” The main one is the requirement that, for the most part, those ferrying passengers for money must have a taxi or similar permit.

Uber faces opposition from taxi unions that “feel threatened” by ride-hailing services, said Hitoshi Sato, an analyst at InfoCom Research in Tokyo. And with taxis generally plentiful on the streets of Tokyo, there is less demand for alternatives from riders.

The head of the Tokyo Hire-Taxi Association, Ichiro Kawanabe, has said there is no need for Uber’s services in Japan because taxis are easy to hail and competitively priced.