Uber Test Shut Down in Japan, Where Another Taxi App Is Already Far Ahead
What's Line Taxi?
by Kari Paul
Mar 4 2015, 5:11pm
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The government in Japan has ordered Uber to put a halt to its pilot ridesharing program in the city of Fukuoka, citing legal and regulatory issues.
The move marks the latest clash between Uber and local governments in the company's ongoing quest to circumvent traditional regulation and expand globally.
Uber first came to Japan last year, launching in Tokyo, but there it operates under slightly different regulations, registering itself as a travel agency to comply with the country's strict taxi laws.
The program in Fukuoka was launched just a month ago, and is still in its early stages, primarily collecting data on traffic demand in partnership with a local university. Under the program, passengers could ride for free and Uber paid drivers directly.
An Uber spokesperson told the Wall Street Journal the company plans to continue the program in Fukuoka, saying the service qualifies as research, not the standard Uber product, since passengers do not pay for the rides.
A government official said the transport ministry will continue to call for a full shutdown of Uber's Fukuoka operations.
While Uber butts heads with law enforcement, a local competitor called Line Taxi has sprinted ahead in the race to expand throughout Japan. Line Taxi is a ridesharing service that emerged from a Japanese messaging app called Line. It functions by partnering with pre-existing, registered taxis, avoiding the regulation that is tripping up Uber. As of February 25, the Uber competitor was available in more than 90 cities across the country.
Fights with local government officials are nothing new for Uber. In December, Spanish officials suspended the service after a judge ruled it didn't comply with transportation laws.
The company has also run into trouble with other pilot programs. An Uber driver in Delhi who was accused of raping a female passenger was working as part of a similar pilot program; Uber caught heat when it turned out the driver was not licensed or background checked. New Delhi's Transport Department banned Uber after the incident.
As the incident in India shows, bypassing traditional regulation has its price, and the company has been increasingly criticized for its safety record.
Uber has surmounted similar roadblocks to its Japan suspension in the past with ease. It took almost a year of finagling with local regulatory bodies before the company could fully launch in New York City. In the three years since then, the company has been wildly successful in NYC, and it is now looking to double its footprint in the next year.