Japan Data

Japan’s Taxi Industry Suffering from a Lack of Drivers

Economy Work

Japan had 230,000 taxi drivers as of the end of August 2023, which is a drop of around 20% since March 2019.

The return to normal after COVID-19 has seen an easing in travel restrictions and a rapid increase in demand for travel, both for tourism and business, which has led to a severe shortage of taxi drivers in Japan. Teikoku Databank conducted a survey looking at the number of employees at 2,428 taxi and hire car businesses and found that there had been a “decrease” at 1,691 companies (69.7%), when compared to 2013. Of those, 352 (14.5%) had seen a “more than 50% decrease” in the number of employees since 2013.

By prefecture, among the companies who saw their numbers drop by at least half, Ibaraki had the highest percentage with 29.2%, followed by Kagawa with 29.0%, and Nara 25.0%. Even companies in urban areas, where there would normally be a high demand for taxis, saw a similar significant drop, including 17.1% in Saitama and 16.9% in Osaka.

Number of Employees at Taxi Companies Compared to 2013

In fiscal 2020, when the COVID-19 pandemic began, more than 80% of taxi companies were in deficit, but by fiscal 2022 this had fallen to 46.7%. A recent recovery in demand has been accompanied by other improvements in the environment for taxi companies, such as an increase in the upper limit of the initial fare. However, there is not enough money spare for wage increases, so with “employees who moved to jobs in other companies in the same industry or different industries during the pandemic not coming back” and companies “not receiving applications from young people,” resolving the labor shortage will be difficult.

There is growing debate on the pros and cons over lifting the ban on paid ride-sharing, where regular drivers can use their personal car to provide rides for a fee. People within the taxi industry have voiced concerns like “the intensifying competition will lead to more employees leaving” and that there are “many issues regarding ensuring safety.”

Taxi Company Profits and Losses

(Translated from Japanese. Banner photo © Pixta.)

taxi labor