Amid a taxi driver shortage, Japan is set to partially lift its ban on ride-hailing services starting next April.

Under the government plan announced Wednesday, nonprofessional drivers will be allowed to operate in specific areas at certain times under the guidance of taxi companies when there is a noticeable lack of rides available.

The plan was discussed at a Digital Administrative and Fiscal Reform Council meeting Wednesday and was proposed as a way of combating the nationwide shortage of taxi drivers amid growing demand for transportation services.

“Based on the severe challenges in regional transportation that we face all over the country, we have decided to begin ride-hailing services using personal vehicles and personal drivers from April next year,” Prime Minister Fumio Kishida said at the meeting Wednesday.

The government plans to collect data from currently operating taxi-hailing apps to determine which areas and times are experiencing the most severe ride shortages and then decide when and where nonprofessionals can act as taxi drivers. The partial lifting of the ban is intended to be implemented in not only rural areas but also city centers.

In order to ensure the safety of passengers and to regulate payments, the plan proposes that existing taxi companies manage the ride-hailing services for now. Allowing other businesses to join the service as middlemen at a later date is also being considered.

The government is set to begin discussions on fully lifting the ban on ride-hailing starting next year, with the goal of reaching a decision by June.

Currently, ride-hailing apps such as Go and Uber only allow users in Japan to call taxis, unlike in countries such as the U.S. where anyone with a driver's license, after going through a screening process, can use their personal vehicle to drive passengers to their selected destination for a fee.

According to the Japan Federation of Hire-Taxi Association, the COVID-19 pandemic and the country's graying population has led to a significant decline in taxi drivers — as much as by 20% during the four years between 2019 and 2023.

Lifting the ban has been discussed over the past year as demand for transportation services has grown, partly due to the resurgence of inbound tourism.

“We conducted discussions with the understanding that the shortage of rides is not just an issue in rural areas with a lack of regional transportation, but also in tourist spots and cities,” said transport minister Tetsuo Saito. “We would like to create a system that would be easy to use for inbound tourists as well.”

However, opposition by the taxi industry remains strong. They claim that the introduction of ride-hailing services will result in unfair competition due to their low prices, and take jobs away from professional drivers without solving the core issue of not having enough drivers.

In a statement released last week, the National Federation of Automobile Transport Workers union said that the implementation of ride-hailing services will exacerbate the driver shortage.

“The safety of passengers and benefits will be reduced, (with) bus and taxi companies experiencing a further decline in revenue and taxi drivers receiving lower pay, resulting in a more severe driver shortage,” they said.

The government plan aims to at least partially address the issue by easing taxi industry regulations, to entice more people to become drivers. It proposes getting rid of the geography test, given the prevalence of navigation technology, as well as shortening parts of their training period.