Ridesharing makes new and unique mess in Japan's taxi industry

Taxi drivers are gaming ride-sharing algorithms in Japan to find more and more lucrative fares, according to digital transformation minister Taro Kono.

The minister's sentiments were expressed in comments read by a proxy at a July 29 working group meeting to discuss the industry. Kono had prepared the comments in advance for the Regulatory Reform Promotion Council, but was unable to attend.

"Even though the vehicle is empty, by displaying that it is picked up, drivers can more easily forgo traditional taxi requests in favor of taking ride-hailing app requests and achieving a higher matching rate, explained [VIDEO] Kono's proxy.

Japan resisted the introduction of ridesharing services for years, but did allow cabs to be summoned using rideshare apps like Uber. Earlier this year, the nation opened to ridesharing services – but they are only accessible from traditional taxi companies' apps, and may only operate in certain areas during restricted hours.

One reason for allowing that limited service was to get more cars on the road, as Japan's taxi industry faces the same labor shortages as many others in the rapidly ageing nation.

Cab drivers manipulating rideshare platforms in search of higher income is therefore unwelcome, as it undermines the strategy to increase supply.

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Japan's rideshare experiment has already needed some tweaks. In July changes were made to allow more cars to operate during heavy rain. ®