Portside Date: March 13, 2017

Author: Nithin Coca

Date of source: March 7, 2017

Equal Times

In 2015, the labour unions that represent Japan’s taxi drivers learned that Rakuten, one of the country’s largest retail and ecommerce companies, had made a large investment in the transportation app Lyft. This was the first sign of an emerging threat – the entrance of ride-hailing apps, most notably the global giant Uber – into the world’s largest city, Tokyo.

“We didn’t even know about ride-sharing, but after this, we started to study about it,” said Kazuhiko Kikuchi, chief secretary of the National Federation of Automobile Transport Workers’ Unions (Jiko-soren), one of several unions that represents taxi drivers in Japan. “We quickly realised that this is going to be a big issue [for us].”

The negative impact that ride-hailing has had on taxi drivers across the world has been well documented. Nearly every market they’ve entered has seen a dramatic drop in taxi usage, followed by wage reductions that, with time, impact ride-hailing drivers as well. In fact, the gig economy has also been shown to have a negative impact on workers wages in many industries.

Japan, however, remains one of the few major developed countries that has yet to adopt the gig economy wholesale.

In fact, Uber was one of the first large platforms to attempt to break into the world’s third largest economy. The threat was palpable, though, because among OECD countries, Japan is country with the second lowest share of income concentrated in the top 10 per cent, after Belgium, and remains a country where CEOs make low salaries. The spread of the gig economy could alter Japan’s relative wage equality and have a huge, adverse impact on taxi drivers.

That is why, once Jiko-soren and others understood the threat Uber posed to their members, they began organising. In the end, they were able to do what few others around the world have – halt Uber’s entrance into Tokyo and preserve the livelihoods of its taxi driver members in Japan’s cities.

“Almost all the unions, from all over Japan, came together with the same purpose – to oppose ride-share,” said Jiko-soren chairperson Masatoshi Takashiro to Equal Times.

The case against Uber

Japan’s taxi sector is highly regulated, mostly a direct result of previous union organising and lobbying. These regulations both ensured protections for workers, decent wages due to government-set fares, and high safety standards for both passengers and drivers.

“In Japan, taxis are a form of transportation that is trusted by people,” said Takashiro.

While pricey, Japanese consumers consider taxis to be safe, reliable and clean. They also provide decent, well-paying jobs for several thousand workers in the Tokyo Metropolitan region.

For Jiko-soren, which represents independent taxi drivers and is an affiliate of the Zenroren national trade union centre, this meant that the potential entrance of Uber could destabilise the industry and have a dramatic impact on the livelihoods of its members.

“There are so many dangerous situations with Uber in other countries,” said Takashiro. “Drivers have been forced to work for very cheap wages.”

One challenge facing Jiko-soren was the fragmented nature of the taxi industry, with several unions representing workers. They range from Jiko-soren, a militant left-wing union, to those who represent corporate taxi drivers and quite often have close relationships with management. In fact, Japan’s various taxi unions had never worked together.

In other cities, it was this disunity that allowed Uber to come in and win. One advantage that Japanese organisers had was that they could learn from this example. Moreover, everyone was facing the threat equally – even corporate taxi companies stood to lose if Uber entered Tokyo.

In March 2016, eight Japanese unions organised a rally that brought together all their members, calling for the restriction of Uber-style ride-hailing and the maintenance of existing taxi regulations.

They sent in their demands to the government, and launched a public campaign alerting consumers to the real threat of Uber – and how, globally, the company has been resistant to the very safety measures that Japanese consumers take for granted.

“[The rally] had a very big impact, because we had never done anything like that before,” said Takashiro. “Even national politicians came, and both newspapers and TV media reported on it. Until then, people did not know about ride-sharing, but after this rally, they got to know about it…[and how] the entire taxi industry opposes this idea.”

It worked. Shortly after the rally, the government released new regulations that essentially ended Uber’s ride-hailing service in Tokyo and stated, bluntly, that ride-hailing would not be permitted in Japan’s major cities.

“That was a good result from our rally and organising efforts,” said Takashiro, but that did not mean the battle was finished.

A Trojan horse

Despite this initial success, Jiko-soren and its allies remain aware that Uber has not given up. The regulations did restrict its use in Japan’s big cities, but it also allowed for ride-hailing services in certain regions, specifically places that are termed “depopulated” where mostly elderly citizens reside. Already, Uber has launched a pilot project aimed at providing ride-hailing in two rural districts. To taxi union leaders, this could be a Trojan horse, and it something they continue to oppose.

“We are sure that they are going to use this opportunity – introducing ridesharing in depopulated areas – to take actions to expand services in the rest of the Japan,” said Takashiro. “[So we] will keep opposing Uber and trying to not to let ridesharing expand to the big cities.”

Moreover, Uber is continuing to lobby the Japanese government to deregulate the taxi sector, having recently joining the newly formed, pro-business Sharing Economy Association. The association is using the 2020 Olympics Games in Tokyo to justify the introduction of ride-hailing to Japan.

“We are waiting for the 2020 Games and we hope that by that time there will be some kind of right to be able to use these [rideshare] services,” said Takashi Sabetto, one of the founding members of Sharing Economy Association of Japan, which counts Uber as one of its members. “Some taxi companies might go bankrupt – but is that a bad thing?” he asks, adding that competition – not regulations – should decide their fate.

Keeping Uber from disrupting Japan’s taxi sector will be an ongoing fight, but as long as the industry sticks together, the chances for victory – and the maintenance of the work standards, regulations and livelihoods they have fought for – remain strong.

[Nithin Coca is a freelance journalist who focuses on social and economic issues in developing countries, and has specific expertise in south-east Asia.]