A sign attached to a car for the start of ride-sharing services is seen in Osaka’s Fukushima Ward on May 31, 2024. (Mainichi/Maiko Umeda)
The Mainichi Shimbun answers some common questions readers may have about ride-sharing services, in which regular drivers use their own cars to transport customers for a fee, now available 24 hours a day throughout Osaka Prefecture in preparation for the Expo 2025 Osaka, Kansai, scheduled from April 13 to Oct. 13.
Question: First of all, how does the Japanese-version of ride-sharing work?
Answer: Ride-sharing began in April 2024 in some areas of five prefectures including Tokyo, Aichi and Kyoto, and then expanded nationwide. The Ministry of Land, Infrastructure, Transport and Tourism specifies the number of ride-share vehicles and permits them to operate in areas and at times when taxis are in short supply. Drivers are employed by cab companies, undergo training, and fares are fixed based on distance and time, similar to taxis. You can hail such cars using a smartphone app.
Q: Is 24-hour ride-sharing operations like the Expo version rare?
A: In August 2024, the transport ministry relaxed ride-sharing conditions, such as for time slots and vehicle numbers for large-scale events. During the “Nenrinpic” national health and welfare festival in Tottori Prefecture that October, 24-hour operations were permitted in almost all areas of the prefecture.
Q: What led to the realization of the Expo version of ride-sharing services?
A: In October 2023, Osaka Gov. Hirofumi Yoshimura expressed a desire to implement ride-sharing services for the Expo. At that time, he proposed allowing new entries, such as IT companies, and introducing “dynamic pricing,” which adjusts fares based on supply and demand, akin to overseas ride-sharing models.
From May 2024, the national government allowed the operation of 120 ride-share vehicles each on Friday and Saturday evenings and 210 vehicles early Saturday mornings in the city of Osaka and its surroundings. However, the prefectural government continued further negotiations with the central government, claiming that if tourism demand from Expo visitors increases, there will be a shortage of taxis.
Q: The prefectural government is very proactive. Why?
A: Nippon Ishin (the Japan Innovation Party), led by Gov. Yoshimura, has long pledged to realize ride-sharing services. The aim is to create new businesses through the “sharing economy,” in which individuals’ free time and unused goods are utilized through information and communication technology. Yoshimura has even criticized the heavily regulated Japanese version as “pseudo ride-sharing.”
The Osaka prefectural and municipal governments estimate that if the maximum number of Expo visitors is 227,000 per day, the number of taxi users for excursions around the prefecture will increase by about 143,000 per day, resulting in a shortage of 1,880 cabs.
Q: Will there really be such a shortage?
A: Contrarily, the Osaka Taxi Association, a general incorporated association of taxi operators in the prefecture, asserts that even with a daily increase of 150,000 taxi users during the Expo, they can accommodate the demand. Although the number of taxi drivers had been declining nationwide due to aging and the COVID-19 pandemic, figures have been increasing in the prefecture since fiscal 2022, according to the Osaka Taxi Center, a public interest incorporated foundation. The number of drivers grew from 20,256 at the end of fiscal 2022 to about 1,000 more a year later, continuing to rise by 100 a month.
Q: Why the increase?
A: The recovery in demand for transportation, including from inbound tourists, as the pandemic subsides, and fare hikes at the end of May 2023, which made it easier for drivers to earn more money, are apparently contributing factors. A taxi company president in the prefecture said, “Currently, there is an excess of taxis.” The Japanese government has approved a system for the flexible use of cabs throughout the prefecture during the Expo, and the taxi association plans to increase the supply of cabs.
Q: Isn’t there going to be increased competition between taxis and ride-sharing vehicles?
A: Possibly. In February, the central government announced that a maximum of 315 vehicles daily for the Expo version of ride-sharing in the city of Osaka and its surroundings could be operated until May 2025. It has allowed 24-hour operations since mid-February, and the number of vehicles to be operated from June onward will be decided after further consultations with the parties concerned, based on the actual performance.
From December 2024 to January 2025, 24-hour ride-sharing operations were trialed in the prefecture. According to Newmo Inc., a Tokyo-based ride-sharing company operating in Osaka Prefecture, the ability to choose operating hours more freely with the 24-hour model led to a 6.5-fold increase in driver applicants. A company representative expressed hope that increasing vehicle numbers would help to tap into dormant demand.
On the other hand, a senior official from the Osaka Taxi Association voiced concern, “Cab companies operate a certain number of vehicles for the convenience of customers, even in places and at times when there are few passengers. If ride-sharing companies focus on profitability and concentrate on locations and times when there are many customers, they will cherry-pick the best rides.”
Q: What happens after the Expo?
A: The Expo version of the service will end. However, the Osaka prefectural and municipal governments insist that inbound tourists will increase over the long term and that there will be a shortage of transportation. To compensate for the abolition or a reduction in public transportation services, the central government also plans to discuss lifting the ban on the entry of non-taxi operators into the ride-sharing market. Nippon Ishin is preparing to submit a new ride-sharing bill to the Diet for further deregulation, and the results of the service during the Expo may serve as a stepping stone.
(Japanese original by Itsuo Tokubo and Motohiro Inoue, Osaka City News Department)
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