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Tokyo - Japan has slammed the brakes on taxi service Uber less than a month after it launched a pilot programme in the country, with a government official saying on Wednesday it likely violates transport laws.
The development marked another blow for the web-based taxi app, which has become an object of scorn from traditional taxi companies in many countries fighting for survival against the rise of the Silicon Valley challenger.
"Last Friday, we met with Uber Japan officials and told them to stop the pilot programme immediately because we suspect it breaches Japanese transport law," said a transport ministry official.
"There are two major problems with their project: First, it could be considered an unlicenced taxi business if they use regular drivers, and second, there are safety concerns" including a lack of insurance.
Responding to the move, Uber said it would continue to talk with officials and said the service would be a plus for urban transport in rapidly-ageing Japan.
Challenges
"We saw this as a unique opportunity to help find a solution and fulfil an important need in Japan's future," it said in a statement.
"In the month since its launch, we've received high volumes of positive feedback from participating riders and drivers in the programme... We will continue our ongoing dialogue with the relevant authorities to clearly communicate programme details and address any concerns."
In February, the San-Francisco-based firm - which lets non-professional drivers become chauffeurs-for-hire at rates far lower than normal taxi rides - launched its "Everyone's Uber" service in the western city of Fukuoka.
Users who needed a ride could pin their location and request a driver through the app downloaded to a smartphone or tablet.
Uber is already active as a paid-for taxi service in Tokyo tying up with professional taxi drivers.
But during the data-gathering pilot project, regular drivers who registered with the company would give a ride to passengers.
Since its founding in 2009, Uber has grown into one of the world's largest start-ups, valued at some $40bn, with operations in more than 200 cities in 54 countries around the world.
But its rapid spread has generated friction with existing taxi operations, and posed challenges for regulators.
Taxi drivers in dozens of cities have staged protests against Uber, and regulators in many cities have sought to shut it down.
Hundreds of taxi drivers from Belgium and France brought central Brussels to a virtual standstill on Tuesday with their vehicles in a protest against the company.
Safety concerns are also rising.
An Indian woman, who alleges an Uber driver raped her in New Delhi, has sued the online taxi service in a US court, accusing it of failing to ensure passenger safety.
Watch this video where Uber Cape Town GM Anthony le Roux explains the safety procedures for partner drivers:
