Strategic management of the Tokyo taxi cab industry: an exploratory study

Taxicabs are an indispensable means of transportation in Tokyo, as they provide a 24/7 door-to-door service for a daily average of 1.3 million people. In 2002, legislation was introduced to abolish restrictions on the number of taxicabs on the road. This relaxation of regulation, together with the corresponding recession, raised new issues such as increasing cab numbers and reducing drivers' wages. The wide variety of stakeholders involved within the taxicab industry have conflicting positions, resulting in little agreement on the possible way forward. An exploratory study was therefore undertaken in order to investigate the management of Tokyo's taxicab operations in order to formulate strategies for improving the service. Two related papers report on the study. This paper starts by providing an understanding of the current situation, examining the roles of the major stakeholders and outlining day-to-day operations. Academic frameworks, for example PEST, Critical Success Factors and the Cultural Web, from the strategic management literature, are used to identify the structure of the industry and analyse the environment in which it operates. The results found that Tokyo's taxicab industry is highly efficient operationally, due to the high standard of customer service, effective driver's learning scheme and active use of IT. However, a paradoxical situation has been identified where the demand for cabs has decreased even though the available vehicles have increased. Finally, a uniform method to measure the level of taxicab service is recommended. Copyright © 2007 John Wiley & Sons, Ltd.