Japan Clears the Way for Tourists to Get an Actual Uber

Japanese Prime Minister Fumio Kishida said Wednesday that the government would largely lift a ban on ride-sharing services in April and allow regular drivers using their own cars to give fare-paying passengers a ride.

Uber has been fighting for a place in Japan’s $17 billion taxi market for years, but was long blocked by rules that generally limit ride-sharing services to licensed taxi drivers working for authorized taxi companies.

Although Wednesday’s move comes with restrictions, it is likely to make hailing a ride more convenient and potentially less expensive for the record number of American and other tourists who have been coming to Japan since pandemic-era restrictions ended.

“We want a system that is easy to use for foreign visitors," said the transport minister, Tetsuo Saito.

Long barred from operating a U.S.-style ride-hailing app in Japan, Uber has adapted by recruiting local taxi partners for its app. It has also built a successful food-delivery business.

Some tourists in Japan already use Uber to get a ride on a licensed taxi. But Uber’s efforts in that area have been outmatched by a powerful taxi boss and the rival app that he created.

Government officials say it wasn’t Uber’s yearslong lobbying blitz that sparked change, but demographic realities. Around 230,000 taxi drivers are active in Japan today, down 15% from five years ago.

Meanwhile, the country has received an influx of overseas travelers. This year, Japan has welcomed a record 1.86 million American visitors through November, and the number is expected to keep rising.

“It has become an urgent matter to address the inconvenience in transport," said Saito.

The government’s new ride-hailing plan comes with some restrictions. Officials say ride-hailing involving regular drivers, as opposed to licensed taxi drivers, is envisioned as a supplementary service for high-demand times in areas of Japan that have too few taxis available. Saito said that includes cities such as Tokyo and Kyoto where tourists may have trouble finding a cab.

Ride-sharing services with regular drivers will still have to be overseen by a taxi company, officials said. That means Uber, at least initially, will have to work with or acquire a Japanese taxi operator to take advantage of the larger driver pool.

However, Kishida, the prime minister, said he wanted a decision by next June on drafting a new law that would allow non-taxi companies to work with regular drivers in ride-hailing. Such a law, if passed, would put Japan roughly in the same situation as many U.S. cities.

Uber said Wednesday it would work closely with taxi companies and look for ways to offer Japanese people more options. It called for considering “further measures that can contribute to the revitalization of the Japanese economy by providing a flexible supply of transportation options."

Until a few years ago, Japanese officials ruled out letting regular drivers into the ride-hailing business owing to fears that the system couldn’t be adequately overseen and would cause safety problems. Japan’s taxi industry has vehemently opposed introducing ride-sharing in a country where white-gloved taxi drivers are carefully trained in etiquette.

In recent months, grumbling about long wait times for taxis has grown louder, and sentiment has begun to change. In an October opinion poll conducted by Nikkei and broadcaster TV Tokyo, 45% of respondents said they were in favor of allowing ride-sharing, while 39% were opposed.

In September, Uber was accepted into the taxi-industry group led by Ichiro Kawanabe, who is known as Japan’s taxi prince because he leads a taxi company founded by his grandfather nearly a century ago. Government and industry officials say Kawanabe has recognized labor-supply challenges and recently warmed to the idea of ride-sharing. He couldn’t be reached for comment.

Peter Landers contributed to this article.

Write to River Davis at river.davis@wsj.com