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Grannies in running shoes deliver the frame to uber in Japan



Uber's strategy for Japan, where ridding is prohibited, is as unique as the country itself – think grandmother in running shoes that deliver ram noodles.

Managing Director Dara Khosrowshahi was in the country last week to emphasize the importance of the market, where the San Francisco-based company has built a growing food supply business, but kept rides limited to car rental and taxi shipments. The archipelago is also home to Uber's largest shareholder, SoftBank Group, and where he plans to increase staff in the coming year.

"The elderly are actually enrolled for Eating Cure," Khosrowshahi told Bloomberg News. "Eats has been a great success for us in Japan. It's going to be a very effective introduction to the Uber brand."

Building up Uber Eats can be the company's best chance now to capture revenue in the world's third largest economy. More than 1

0,000 restaurants and 15,000 couriers are part of a delivery network spanning 10 Japanese cities, according to CEO. It provides service within reach of about 15 percent of the population, compared to 70 percent in the US, and provides ample space for growth, he said.

With an unemployment rate of 2.4 percent, close to the quarter's low, Japan's labor market is tight. The population is aging; adult diapers outsell baby diapers. Seniors go for food delivery to find jobs, as well as get hot meals delivered to their doors.

While most employees deliver by bike or scooter, the elderly in search of training do it on foot, Khosrowshahi said. "This is an area unique to Japan and we see if we can expand to the rest of the world," said CEO.

To support its Eats business, as well as the sizeable efforts to provide shipping services for taxi companies, Uber plans to increase full-time employees in Japan by over 30% over the next year from about 100 now in areas such as account management , sales and local business. Even at this pace, there is still a small share of Uber's global leadership team of 22,000.

Shares in food supply companies Yume No Machi Souzou Iinkai Co and Ride on Express Holdings Co. hit more than 3% in Tokyo. "Uber Eats has a groundbreaking, cool image, so worries can easily develop that young users can switch to Uber Eats," said Iwai Cosmo Securities corporation chief Toshikazu Horiuchi.

Given Japan's strict rules on equestrian sports, Uber has chosen to work with regulators. A pilot program rolled out in 2016 to provide riders to the elderly in the small coastal town of Tangocho, where an aging population was left with dwindling public transport services.

  While guilty is illegal in Japan. Uber Eats has been good. Photo / Getty Images
While mediation is illegal in Japan. Uber Eats has been good. Photo / Getty Images

Last year, Uber turned to partnership with local taxi companies. It now has deals with eight taxi companies in so many cities, including popular tourist destinations Kyoto, Osaka and Hiroshima. Sony Corp., startup Japan Taxi and China's Didi Chuxing are among those who have rolled out competing taxi-hailing apps, seeking to make it easier for consumers to hail rides and get to their destinations. Uber Black, car rental, is currently only available in Tokyo.

"It will take time, but we like what we see in terms of market potential," Khosrowshahi said. "The innovations we are going to make in taxi here are going to carry around the world."

The CEO also took time during his visit to Tokyo to meet SoftBank's Masayoshi Son, who has built a 13 percent stake in Uber, worth around US $ 9.8 billion. The conversation focused on the raging giant's blueprint for growth during the meeting.

"If I'm in Japan, you can bet I'm going to see Masa," Khosrowshahi said. "Masa is really focused on where we take our business three years from now."

The son is about to raise money for a second US $ 100 billion Vision Fund; One question is which assets he can seek to sell to fund Softbank's share of another investment fund. The son raised $ 28 billion for the first fund, partly by selling its lucrative stake in Alibaba Group Holding Ltd.

While Khosrowshahi refused to detail what he and Son were discussing, takeaway is that SoftBank's commitment to Uber is too long-term. Takeaki Nukii, a spokesman for SoftBank, could not immediately comment on the topic.

"Masa and I, we're talking about growth," Khosrowshahi said. "We're not talking about exit."

– Bloomberg


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