japan's 'taxi prince' fights to keep uber at bay

That's not a problem, though, because he rarely has trouble getting around; Kawanabe runs Nihon Kotsu Co., Tokyo's biggest taxi company.

Visitors to the archipelago know that hailing a cab here is a unique experience. Taxis are easy to find (when it's not raining) and usually offer impeccable service, from automated doors to glove-wearing drivers eager to get passengers to their destination.

Even though fares are among the priciest in the world, stringent regulations and top-notch services have kept Uber Technologies Inc.'s market share at less than 1 percent of monthly rides in Tokyo, according to data from a person with knowledge of Uber's business and figures from the Japan Federation of Hire-Taxi Associations. Now that SoftBank Group Corp. unveiled plans this week to invest in Uber, the dynamics could change, including a more aggressive push by the ride-hailing company.

Before that happens, Kawanabe is aiming to shake up his own ¥1.72 trillion ($15 billion) industry, with a taxi-hailing app and plans to offer fixed-rate pricing and carpooling. So far, his ambition earned him Uber's wrath and a place on its blacklist.

"We're using Uber as an example of what not to do," Kawanabe said, citing examples of the company's battles with regulators, drivers and string of scandals. Kawanabe said he was unable to create an account under his name, and got no response from Uber when he asked why. "They're making too many enemies. I just don't like that kind of corporate culture."

Kawanabe, 47, is taxi royalty. His grandfather, who founded Nihon Kotsu in 1928, prepared him from an early age, telling him that he would inherit the family business. "He brainwashed me," Kawanabe said. "I never doubted that I would run the company someday."

After getting an MBA from the Kellogg School of Management and a stint as a McKinsey & Co. consultant, Kawanabe found himself running the enterprise sooner than he anticipated, when his father passed away a decade ago. Young, full of ideas and married to the granddaughter of former Prime Minister Yasuhiro Nakasone, Kawanabe was dubbed the "Prince of Taxis" by local media.

Since delegating day-to-day operations to a hired president, Kawanabe says he now spends 80 percent of his time at Japan Taxi Co. --- the startup he established to build smartphone applications and dream up new services. He's also the chairman of the taxi federation, giving him a platform to push for changes in the staid industry. "I wear jeans to Japan Taxi, and a suit the rest of the time," he said.

If Kawanabe seems relaxed, that's because Uber isn't a serious threat to Nihon Kotsu and other incumbent fleet operators. The San Francisco-based company has fought taxi companies, driver unions and regulators in the U.S. and Europe, but is playing by the rules in Japan.

There are specific regulations for commercial passenger businesses, including on how to set fares and even where to place signage inside and outside a vehicle. Drivers have to obtain a commercial license by passing an exam and a road test. Unlicensed, privately operated vehicles and drivers are forbidden.

Fire up the Uber app in Japan and there are usually a few cars nearby. Leave central Tokyo, or nearby Yokohama, and they're non-existent. In fact, anyone summoning an Uber ride is getting a car or van that's operated by an existing, fully licensed car-hire company. Essentially, Uber in Japan's big cities is a dispatch service for an established fleet operator, not the cheap ride-sharing for which it's best known.