The back door of the car swings wide open and the driver greets you. He is wearing white gloves and spots a hat that resembles policemen.

After you get in, the door automatically closes with a click of a button from the driver’s side. Welcome to the world of taxis in Japan!

In Japan, something odd is happening. Uber, which is a name that we are all too familiar is losing to a local Japanese taxi player.

He is known as Japan’s Taxi Prince – a strange name but not entirely uncommon in the Japanese societal context.

Ichiro Kawanae is the chairman of Japan’s biggest taxi company, and his taxi app, Go, is dominating the local Japanese market. Here are 5 things that you need to know!

#1 Who is Ichiro Kawanabe?

Ichiro Kawanabe is the CEO of Nihon Katsu, which is one the largest taxi and limousine operators, and he is the third-generation owner of the company.

Nihon Katsu makes up one of the four main taxi companies in Tokyo, alongside Daiwa, Teito, and Kokusai.

He previously worked as a consultant in McKinsey and obtained his Master of Business Administration from Northwestern University.

Ichiro also founded the app Go and now serves as the chairman. Hiroshi Nakajima is currently the CEO.

#2 Ichiro lobbied the government through the taxi group

Welcome to Japan where big businesses band together and form powerful business lobbies that effectively monopolize and set rules for the markets they are in.

Ichiro did three main things to protect the local taxi markets from Uber in the initial stages.

Firstly, Ichiro convinced the government that Uber, like any other taxi company in Japan, needs to abide by Japanese regulations for the industry. In 2018, Uber complied by seeking to get licensed taxis to sign up for the app.

Secondly, with him leading the taxi industry group in Japan, he convinced other taxi companies to not go with Uber and instead join him. For detractors, he was ruthless as he asked Kazutaka Tomita, CEO of Hinomaru Kotsu, to resign as chairman of the taxi industry group when Tomito sided with Uber.

Thirdly, in the meantime, he got most of the taxi drivers to sign up for his ride-hailing apps Go and Japan Taxi.

#3 Go is the top ride-hailing app in Japan

The Go app currently commands around 70% of the domestic ride-hailing market in Japan and is beating other competitors such as Uber, Didi, and S.Ride.

Growth in the app has been phenomenal. Revenue is expected to grow by 70% from Y$ 10.6 billion in 2022 to Y$ 18 billion in 2023.

Goldman Sachs valued Go at Y$ 135 billion (US$1 billion) and invested Y$ 10 billion in the company in the recent investment round.

Go has plans to list itself in the Japanese equity market in the next few years. Interest is expected to be hot with Goldman Sachs as its initial investor and its dominant position in the market.

#4 The taxi and ride-hailing markets are expected to grow with Ichiro as the main beneficiary

According to Statista, the Japanese taxi and ride-hailing market is projected to grow by an annual average of 4.0% from US$4.1 billion in 2023 to US$4.8 billion in 2027.

About 28% of total revenue will be generated through online bookings by 2027, where average revenue per user is expected to increase from US$320 in 2023 to US$380 in 2027.

This will be driven by the increased adoption of ride-hailing apps where Goldman Sachs projected that the percentage of people who book a ride through an app will increase from 5% in 2020 to 30-40% in 2029.

As the chairman of Go and heads one of Japan’s biggest taxi companies, Ichiro is poised to be the main beneficiary of this upward trend.

#5 However, Ichiro’s position in the market is not bulletproof

Uber has been making inroads into the Japanese market with the help of Hinomaru Katsu and other taxi companies.

In April 2023, sales rose by 5 times from April 2019 as it has catered increasingly to foreign tourists that have returned to Japan after the reopening in early 2023.

While the domestic Japanese market is still dominated by Go, Uber’s branding still shines through for foreigners in Japan. It also helps that apps designed for Japanese consumption are woefully ill-equipped to serve foreigners in Japan.

Conclusion

The taxi prince, Ichiro Kawanabe, represents a good case study for many local ride-hailing operators in other countries to compete with Uber. Similar to Grab’s experience in Malaysia, Go’s rise represents the intensifying competition in the ride-hailing space.