Japan cabs falsely displaying ‘reserved’ signs to boost ride-hailing app matching rate: minister

TOKYO — Some cabs in Japan are falsely marking themselves as “reserved” so they can respond quickly to orders from ride-hailing apps and boost their matching rate on the services, administrative reform minister Taro Kono has claimed.

Kono’s comments were part of a speech read out by a bureaucrat on his behalf at a July 29 meeting of a working group of the national government’s Regulatory Reform Promotion Council, held to discuss the effects of the Japanese version of fee-based ride-sharing using private cars.

In the speech, Kono stated, “I hear there are attempts (by taxi drivers) to raise their ride-hailing app matching rate by indicating their cars are en route to a customer even though they are not, so that they can respond immediately to orders via the apps.”

If true, this may be a violation of the Road Transportation Act, and Kono criticized the practice, saying, “It creates a sham matching rate.”

Ride-sharing using general drivers in Japan is supposed to fill the country’s cab shortage, and the matching rate on taxi-hailing apps is a key taxi occupancy indicator. For taxi companies that do not want ride-sharing operators to expand, a high matching rate can be an indication that they are providing people with sufficient means of transportation.

In response to Kono’s accusation, a member of the working group commented, “I hear cab companies instruct their drivers (to show a ‘reserved’ sign).”

A senior official from the transport ministry, which oversees taxi companies, told the working group, “Generally, cabs hailed on apps charge a dispatch fee, which increases the driver’s actual income. I assume drivers are avoiding cruising around in search of customers or picking them up at train stations, and are instead turning to app users.” The official said that displaying a “reserved” sign even when the vehicle is available is “problematic under the road transportation law.”

On the other hand, there are currently cases where ride-sharing drivers are not allowed to pick up customers at places such as train stations and airports. The transport ministry says it intends to address this issue by creating guidelines, acknowledging that ride-sharing operations vary depending on host facilities.

In a regulatory reform implementation plan approved by the Cabinet in June, the government indicated that it would immediately start discussions of a new law that would allow parties other than taxi companies to enter the market. On July 29, it was decided to hold a preparatory meeting behind closed doors with members selected from the working group. Kono stated, “I would like to see issues (for the new law) be summarized so that we can promptly move on to the next step when necessary.”

(Japanese original by Naoko Furuyashiki, Business News Department)