TOKYO (Reuters) - Uber Technologies Inc is reviewing its ride sharing service in the southern Japanese city of Fukuoka after the transport ministry said it had banned the pilot project, citing potential legal concerns.
The halt is the latest to affect San Francisco-based Uber, which is fighting bans in many countries across the world for alleged violations including using unlicensed drivers.
Uber’s month-old Fukuoka service pays drivers who use cars registered for personal use to ferry around passengers, a business model that potentially violates the Road Transportation Act, transport ministry official Hidetaka Sakai told Reuters.
Insurance for the drivers and passengers may also be an issue, Sakai added.
Uber began operating in Tokyo in 2013, but it is registered there as a travel agency and hails taxis or licensed drivers with business-registered vehicles. This allows Uber to operate in Tokyo without infringing on the Road Transportation Act.
Asked about the ban, an Uber spokeswoman said the service was aimed at helping the city of Fukuoka collect data for its transportation needs, and that the company was now “revising the format for this service”.
“We will continue our ongoing dialogue with the relevant authorities to clearly communicate program details and address any concerns,” spokeswoman Evelyn Tan told Reuters by email.
Uber says it operates in 55 countries, but its rapid growth has been accompanied by controversy.
Last week, Uber announced a free service in Seoul, its second bid in a month to operate legally in South Korea after the authorities indicted chief executive Travis Kalanick for the company’s alleged transport violations.
In recent weeks, Uber suspended its service in Boise, Idaho, in the United States, filed a complaint in Europe over what it calls unfair treatment in France and suffered a U.S. security breach that disclosed details on 50,000 drivers.
Writing by William Mallard; Additional reporting by Teppei Kasai; Editing by Mark Potter and Miral Fahmy