SoftBank aims to steer Japan’s taxis into age of Uber

Backing entry of China’s Didi, tech titan pushes for evolution from within industry
YUICHIRO KANEMATSU, Nikkei staff writer
Unlike Japanese taxis, U.S. ride-hailing apps do not charge for calling a ride. Lately, most provide fare estimates when users book rides, and prices generally match the quotes, making the route a driver takes no longer a concern. The app quickly and precisely calculates the fee, as well as how long the driver will take to arrive, by processing high volumes of data, including road conditions.
Of course, the tech does not always favor consumers. Prices rise and fall with demand, often doubling or tripling during bad weather or around major events. But customers can choose between competing services in such instances, and there are even apps that show where prices are higher so users can walk to a cheaper spot to catch a ride.
Labor regulator
Didi’s entry will likely reignite the debate over ride-hailing services in Japan. But the taxi industry is a major employer in cities outside metropolitan areas, and it acts as a sort of pressure valve for the labor market. Disputes over how to treat, and whether it is necessary to protect, drivers at car-hailing services are unlikely to be solved easily.
In the U.S., such services are competing furiously on price. With rival Lyft eating into its market share, Uber is biting back, including by selling limited $12-per-month passes in certain cities, such as San Francisco. These passes let users ride fairly long distances alone for a flat $6.99, or share a ride for $3.49. Venture capitalist cash is effectively discounting transportation fees.
Drivers’ lot
Uber is making some effort to improve the treatment of drivers, including opening a 24-hour hotline, but veteran drivers continue to leave due to poor pay. Yet new ones keep pouring in thanks to the company’s strong brand recognition. With endless substitutes available and the company planning to switch to self-driving cars eventually anyway, the treatment is unlikely to improve significantly.
There are plenty of legally gray areas in Uber’s labor environment as well. Drivers are considered off the clock when they have the company app open but are waiting for customers. If that downtime was considered part of working hours, drivers’ pay would in many cases fall below U.S. state minimum wage laws.
Drivers occasionally get invited to join groups bringing lawsuits against Uber, according to one former driver for the company. But Uber “settles right away,” and claimants get only “a small amount of money. It doesn’t lead to any real improvement,” the ex-driver said. Ironing out how to guarantee good treatment of drivers will likely bog down discussions of whether to allow such services into Japan.
One of the biggest advantages of ride-hailing services is a mechanism for adjusting supply and demand by changing price. When it rains, prices instantly rise to meet demand, and cars quickly converge on the area. But for traditional taxi companies with limited driver rosters, it would be difficult to quickly scale up supply with new technology alone.
One thing is certain: once customers get a taste of car-hailing apps, it is hard to go back.

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