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Article Japan: Government Allows Taxi Companies to Operate Limited Ride-Sharing Services from April 1, 2024

The Japanese government lifted significant parts of its ban on ride-sharing services beginning April 1, 2024, allowing taxi companies to operate these services in areas and at times in which taxis are in short supply.

The lifting of the ban follows the government’s adoption on December 20, 2023, of the Digital Administrative and Financial Reform Interim Report (Interim Report). The Interim Report had recommended that from April 1, 2024, taxi companies should be permitted to operate transportation services utilizing local private cars and drivers who do not have licenses to drive taxis, as well as to dispatch rides and collect taxi fares through cell phone applications. The report called for limiting these operations to areas and times where there was a shortage of taxis. (Interim Report, at 4.)

Background to the Government’s Decision

In principle, the Road Transportation Act (Act No. 183 of 1951, as amended) prohibits a person who does not have a license to drive a taxi from using their private car to transport other persons for compensation. (Road Transportation Act art. 78.) However, it also provides exceptions in the following cases:

  • In an emergency due to a disaster.
  • When municipalities, specified nonprofit corporations, and persons specified by an ordinance of the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) transport local residents, tourists, or other persons visiting the area.
  • When there is no other reasonable measure in consideration of public welfare. In such cases, the transportation is limited in area and period, and permission from the minister of the MLIT must be granted. (Art. 78.)

The cases in the last point above apply to new ride-share systems. The government determined that ride-share systems are needed for public welfare mainly for the following reasons:

  • A decline in transportation demand due to population decline has contributed to the discontinuation of bus routes in remote areas.
  • A surge in retirement of taxi drivers during the COVID-19 pandemic caused a shortage of taxi drivers.
  • The demand for taxis has increased with the rise in the number of tourists from foreign countries. (Interim Report, at 4.)

On March 13, 2024, the MLIT designated four areas where taxi shortages exist and ride-sharing would be allowed. Because of the short notice, it may take time for taxi companies to find ride-share drivers and begin operating ride-share services. On March 29, 2024, the MLIT added eight areas for ride-sharing that would start May 1, 2024.

The government is considering further expansion of ride-share operations to entities other than taxi companies. The decision will be made by June 2024. (Interim Report, at 5.)

Sayuri Umeda, Law Library of Congress
April 16, 2024

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Chicago citation style:

Umeda, Sayuri. Japan: Government Allows Taxi Companies to Operate Limited Ride-Sharing Services from April 1. 2024. Web Page. https://www.loc.gov/item/global-legal-monitor/2024-04-15/japan-government-allows-taxi-companies-to-operate-limited-ride-sharing-services-from-april-1-2024/.

APA citation style:

Umeda, S. (2024) Japan: Government Allows Taxi Companies to Operate Limited Ride-Sharing Services from April 1. [Web Page] Retrieved from the Library of Congress, https://www.loc.gov/item/global-legal-monitor/2024-04-15/japan-government-allows-taxi-companies-to-operate-limited-ride-sharing-services-from-april-1-2024/.

MLA citation style:

Umeda, Sayuri. Japan: Government Allows Taxi Companies to Operate Limited Ride-Sharing Services from April 1. 2024. Web Page. Retrieved from the Library of Congress, <www.loc.gov/item/global-legal-monitor/2024-04-15/japan-government-allows-taxi-companies-to-operate-limited-ride-sharing-services-from-april-1-2024/>.