With the dawn of the digital age, new kinds of products and sharing services emerged in the transportation sector, promising convenience, affordability, and efficiency. While entrepreneurs forecast good market prospects, the Japanese government is left to evaluate how it will regulate and tax these products. The concept of Mobility-as-a-Service (MaaS) culminates in a single mobile app managing all means of public transportation to achieve tailor-made mobility.

Opportunities and risks of mobility services

MaaS and the concept of a sharing economy suggest a more efficient and environmentally friendly use of resources. For Japan, such efficiency gains appear to be a means to cope with an aging society and depopulation in its rural areas . Seeing this potential in MaaS, the government’s “Smart Mobility Challenge” subsidizes pilot projects targeting regional mobility issues with technological approaches. On-demand services backed by artificial intelligence (AI) could mitigate diminishing bus lines, for example.
Sharing services have been particularly embraced in urban areas by local governments and consumers alike, but they still receive their fair share of skepticism and regulation. For years, Japanese authorities have been tackling the problem of abandoned bicycles . Accordingly, bicycle-sharing services must ensure their users park bikes at designated places. The same applies to the few e-scooter sharing companies participating in government-sanctioned field experiments in some larger cities. The e-scooter sharing industry is still being evaluated with debate over the appropriate maximum speed, lane usage, and helmet use. Sharing a car ride is yet a different issue.

The emergence of ride-hailing apps in Japan

Ride-sharing is strictly regulated. If people want to share their journey, they may sign up for ride-sharing websites obliging users to equally divide fuel and toll expenses. Ride-sharing involving a passenger fare falls under the category of transportation for commercial purposes, which requires special driver’s licenses , business licenses, and commercial insurance. Consequently, world-famous ride-hailing companies Uber and Didi had a rough start in Japan as circumventing costly regulations did not work. These two companies and a handful of domestic companies now offer taxi-hailing apps matching the user with contracted drivers. They advertise quick availability and transportation through AI, vehicle tracking, and optional in-app payment. However, since drivers must legally conclude their contracts for each trip with a single individual, widespread commercial carpooling, as seen in other countries like the U.S. and India, is still impossible until anticipated amendments to ride-sharing legislation come into effect. How this will affect passenger numbers of established taxi companies and if they will be able to adapt remains to be seen.


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