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In fiscal year 2024, the number of passengers carried via taxi and limousine services in Japan amounted to around **** billion, increasing from roughly **** billion in the previous year. Even though passenger land transportation in Japan is dominated by railways and buses, taxis are commonly used for short-distance transportation, often at night, when railways and buses stop operations until the following morning. 

The emergence of ride-hailing apps

Passenger transportation is strictly regulated. Hence, ride-hailing companies like Uber and Didi had a rough start in Japan as they struggled to circumvent costly regulations. Nonetheless, they have established themselves in the Japanese market with several domestic competitors offering taxi-hailing smartphone applications that match users with contracted drivers. They advertise quick availability and transportation through artificial intelligence, vehicle tracking, and optional in-app payment. Declining passenger numbers and a shortage of drivers have impelled Japanese taxi companies to adapt their services to digital platforms. Today, over ** percent of Tokyo’s taxis offer hailing via mobile app.

Renting, sharing, pooling: What you can and cannot do with a car in Japan

For long trips, people prefer rental cars to cabs. Their demand has led agencies to increase their fleet continuously. For short trips, car sharing has received increased attention, user numbers, and vehicles. Some companies, like Times Mobility Co., Ltd. - provide both car sharing and car rental services. However, sharing the ride itself with other passengers may be illegal - at least for commercial purposes. Even taxi businesses may not pool various passengers unless one person acts as the group's representative. Currently, the law only approves private cars operated by municipalities or NPOs to carry passengers for a fee if public transportation is quasi-non-existent or inaccessible for people with disabilities. Still, there are ride-sharing websites that match travelers under the premise that fuel and toll expenses are equally shared only.