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Uber Is Moving Into Japan One Small Step at a Time

May 22, 2018, 2:56 PM UTC

Uber has finally managed to win over the Japanese government — kind of.

After years of struggling to get a foothold in Japan, Uber just got approved for its first taxi-hailing pilot service in the country. It’s a relatively small win for Uber, as it won’t be allowed to set up its own fleet of drivers and it must continue to obey local rules. For five years, Uber has been very careful and hasn’t applied its aggressive strategy of seeking to disrupt the country’s 1.72 trillion yen ($15.5 billion) taxi industry.

Rather, the tech giant is taking a different approach. This summer, Uber will connect passengers with local taxi drivers in Awaji, a remote island of 120,000 people and a dozen taxi companies. In other words, Uber will begin its expansion in Japan as a taxi dispatcher. Financial details of the partnership were not disclosed.

In February, Uber’s new CEO Dara Khosrowshahi told investors in Tokyo that Uber must change the way it does business in Japan. “It is clear to me that we need to come in with partnership in mind and in particular partnership with the taxi industry,” he said at the time.

The ride-hailing giant has been unable to unleash its full services as regulations outlaw non-professional drivers from transporting paying customers, but it does already operate its UberEats service in four Japanese cities.

The move in Awaji comes months after Uber and Sony both announced plans on the same day to expand further in the country. The competition is fierce as Sony, Nihon Kotsu, and Didi Chuxing all look to offer some variation of taxi-hailing services in Japan.