Uber Technologies Inc. (UBER) has launched its ride-hailing app in Tokyo by partnering with three local taxi companies.
Uber has teamed up with taxi operators Hinomaru Limousine, Tokyo MK Corp and Ecosystem for users to hail taxis using the Uber app in Tokyo. The San Francisco-based company hasn’t been able to offer its own ride-hailing services in Japan due to strict government regulations. Apart from the Tokyo launch, Uber has already introduced the smartphone taxi-hailing app in smaller cities in Japan.
Uber has been active in Japan through its Uber Eats food delivery service, which in recent months has gained in popularity amid the coronavirus pandemic.
“We wanted to do it right, having learned lessons in smaller markets,” Tom White, head of Uber’s Japan operations told Bloomberg in an interview. “We are in a better position to not just offer a good service to riders, but also to have lasting relationships with taxi companies.”
White said that Uber still sees tremendous opportunity in this market adding that the success of Uber Eats shows that people are open to the brand.
In the past few months, Uber has been focusing on ramping up its food delivery business as the demand for the service has been offsetting weak rides demand during the coronavirus pandemic. The ride-hailing company has reportedly made an offer to buy Postmates, a startup delivery service, in a deal valued at $2.6 billion.
Shares in Uber rose less than 1% to $30.68 as of the close on July 2, trimming this month’s drop to 16%. The decline erased most of this year’s earlier stock gains.
Five-star analyst Jake Fuller at BTIG last week maintained a Buy rating on the stock with a $47 price target but cautioned that consensus on the company’s financial performance is likely “aggressive”.
Fuller notes that the “ride hail recovery” is not bending up as work-from-home policies persist and work-related ride volume remains challenged. However, the analyst contends that this month’s stock price decline suggests that the risk to estimates appears to be priced in.
The rest of the Street shares Fuller’s bullish rating outlook. The Strong Buy analyst consensus boasts 26 Buys versus 3 Holds and 1 Sell. The $40.97 average price target implies shares have room to rise 34% in the coming 12 months. (See Uber’s stock analysis on TipRanks).
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