A government panel proposed Wednesday that bus and railway operators be considered for entry into Japan's ride-hailing industry.

The proposal was made by the Regulatory Reform Promotion Council, chaired by Tetsuro Tomita, adviser to East Japan Railway.

At a meeting of the council on the day, Prime Minister Shigeru Ishiba said: "Regulatory reforms are extremely important to overcome challenges caused by the population decline, realize 'regional revitalization 2.0' and shift to a value-adding economy. My cabinet will promptly approve a regulatory reform implementation plan."

The Japanese approach to ride-hailing services, which began in April 2024, allows individual drivers to use their private vehicles to offer paid rides under the supervision of taxi companies. Bus and taxi operators have not been permitted to undertake this supervisory role.

The council called for promoting ride-hailing services to address the nationwide transportation shortage and suggested a trial for bus and railway operators to identify potential safety and other issues.

It also proposed system revisions to relax and clarify requirements for bus and railway operators to obtain taxi business licenses.