Japan’s transport ministry will increase financial support for joint ride-hailing services starting fiscal 2026, aiming to help areas with limited bus and taxi access.

The plan targets collaborations between multiple local governments and business operators, addressing difficulties in launching services that require substantial resources.

Currently, Japan has only one joint ride-hailing initiative, connecting Tsukuba and three other municipalities in Ibaraki Prefecture.

The ministry plans to let drivers serve clients across city lines and prioritize taxi dispatch, using ride-hailing only when taxis are unavailable.

Officials are also considering allowing drivers to operate vehicles from different bus companies.

As of April 30, 2,057 regions in 717 municipalities face restricted transport options, with 655 of these areas at the initial stage of exploring ride-hailing solutions.

The ministry aims to eliminate such areas by the end of fiscal 2027.

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🔗 Source: Japan Times

🧠 Food for thought

1️⃣ Japan’s transportation gaps highlight the scale of rural mobility challenges

The ministry’s initiative addresses a massive infrastructure problem affecting over 2,000 areas across 717 municipalities where transportation options are limited or unavailable1.

This represents nearly 40% of Japan’s roughly 1,700 municipalities facing some level of transportation insufficiency, with 655 areas still in early planning stages for solutions like ride-hailing1.

The scope becomes clearer when considering Japan’s broader taxi industry decline: passenger numbers fell 44% from 3.3 billion in 1989 to 1.45 billion in 2016, while the number of taxis decreased by only 10%2.

This mismatch created easier urban taxi access but left rural areas increasingly underserved as demand concentrated in cities.

The government’s fiscal 2027 target to eliminate these transportation-poor areas signals recognition that market forces alone haven’t solved rural mobility gaps that affect millions of residents.

2️⃣ Japan’s cautious regulatory approach contrasts sharply with global ride-sharing models

Unlike countries where private platforms like Uber operate independently, Japan requires ride-sharing services to partner directly with existing taxi companies and municipal governments34.

Currently, only one joint ride-hailing service operates nationwide—involving Tsukuba city and three other Ibaraki Prefecture municipalities—demonstrating how restrictive the current framework remains1.

The new policy allows taxi companies to employ drivers without traditional licenses, but maintains strict oversight that prevents the disruption seen in other markets4.

This regulated approach reflects Japan’s preference for gradual integration over rapid market disruption, particularly given concerns about protecting existing taxi operators who have historically held significant political influence.

The collaborative model requiring multiple municipalities to share drivers and coordinate with taxi dispatch systems represents a uniquely Japanese solution that prioritizes stability over innovation speed.

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