Kyoto's MK Taxi Tries to Transform Japan

A Korean entrepreneur seeks progress in a xenophobic nation.

Today, Japan is home to approximately 700,000 Korean nationals, the largest proportion of whom live in Kansai. Osaka's Tsuruhashi district is often referred to as "Korea Town." Aside from a bustling market, it is home to countless bars and restaurants catering to the city's thriving Korean population, and it has a reputation for being spirited and friendly.

Reeking
Taxi drivers, on the other hand, have a reputation for being an uncouth, somewhat surly lot. Uncommunicative, middle-aged men populating cars reeking of stale cigarette smoke are the norm. The drivers' smart shirts, ties and white gloves are mere window dressing. Little respected by the majority of society, drivers club together in a spirit of solidarity fostered by their faux outsider status.

Battling this public perception was one of the key tenets of Aoki Sadao's plan when he started Japan's most progressive taxi company, MK Taxi, in Kansai's cultural capital, Kyoto. Initially starting out as Minami Taxis, the company merged with local rival Katsura Taxis in 1961, thereby forming MK Taxi, or just "MK" as the company is popularly known.

From the beginning, Sadao, a Japanese citizen of Korean descent also known as Yoo Bong Shik, placed great emphasis on presenting a polite, smart face to the public to encourage the belief that MK was a cut above the average Japanese taxi firm.

"I wanted to make drivers feel proud of their job, to have greater self-respect and self-confidence," he says. In order to help realize this goal, Sadao started paying MK drivers a higher-than-average wage. Special employee apartments were designed and constructed, and drivers were encouraged to continue their education in night classes or at foreign-language schools.

Stevie Wonder
The English language ability of many MK drivers has made them a favorite of the multitude of foreign tourists who visit Kyoto every year. Offering personal tours as well as regular metered taxi services, MK has transported high-profile passengers including Stevie Wonder, Audrey Hepburn and Britain's Prince Philip. Encouraged by company founder Sadao's exhortations, taxi drivers who show an exceptional aptitude for English are sent abroad for further language instruction.

In 1975, MK started hiring university graduates as drivers, which caused consternation among some parents. But a survey of students by a member of Kyoto University's Faculty of Economics in the mid-90s found that MK Taxi ranked in the top 10 of national companies offering the best-quality goods or services. Alongside household heavyweights like Sony and Toyota, MK Taxi pulled in at No. 9. Mitsubishi came in tenth. "Our customers are often surprised to find that their driver is a university graduate, but we offer many career opportunities and job security for our drivers," Aoki explains.

The ongoing battles over fare reduction began with a 1981 proposal by Sadao to reduce passenger fares. This proposal was based on the cheaper-fare-equals-more-passengers-equals-greater-profits theory, but was met with indifference by Osaka's transport ministry officials.

Permission was reluctantly granted two years later, but the subsequent chain of appeals and counter-appeals dragged on for 10 years until 1993, when MK introduced its lower fare policy. It was an immediate financial success.

Emboldened by this victory, MK expanded as the rest of the country stagnated. Operations in Osaka started in 1997, closely followed by Tokyo, Kobe and Nagoya. The latter city was the scene for MK's 2001 battle with the authorities.

Defiance
Though the Nagoya District Court, in a landmark decision in August 2001, granted MK the right to run a promotional free taxi service, the Ministry of Land, Infrastructure and Transport refused to recognize the court's decision and declined to issue license plates to the cabs.

Nonetheless, in a rare show of defiance, the Nagoya District Court refused to back down in the face of the ministry's intransigence, and in October 2001 again told the government that MK's free taxi plan was legal. Facing mounting media and public pressure, the government backed down at the end of the year.

Shortly after deregulation, MK kept up its pressure on the competition by slashing fares by 20 percent, offering an initial tariff of just JPY500 to cover the first 1.8 kilometers of a journey.

Tied in with this expansion is the group's ongoing dedication to training its drivers to be unfailingly polite and ensuring that they are nattily attired in tailor-made uniforms.

But it's not just on the human front that MK continues to forge ahead: In conjunction with Fujitsu, the company has recently installed a GPS-controlled CTI (Computer Telephony Integration) Automatic Car Allocation system at a cost of some JPY600 million. Implementation of this system immediately increased the number of taxi allocations from 5,900 to 7,000 a day and halved the average waiting time for customers to approximately 5 minutes. Within three months, daily receipts had increased by 7 percent.

"The customer-oriented principle is a causal factor in the successes of the system," stresses executive managing director Aoki Yoshiaki.

Because of the company's willingness to challenge the establishment over the years, MK Taxi is not without its critics. Other taxi companies resent MK's high media profile and aggressive discounting policies, while conservative media critics snidely call the company "flamboyant."

One particularly sour moment occurred in the summer of 2000, when owner Sadao held meetings with the Democratic People's Republic of Korea's vice-premier, Kwak Porn Gi. Ethnic Korean Sadao was keen to take advantage of the then-warming relations between the DPRK and Japan with a view to exporting 1,000 taxis in order to establish a tourism-oriented taxi business in North Korea.

This meeting met with furious distaste among the far-right nationalists with their ear-splittingly noisy trucks. One June weekend, as I entered the MK Bowl to watch a five-a-side soccer tournament, trucks were circling the complex, speakers cranked to 11, as a voice agitatedly bellowed out, "MK Taxi! Nippon kara dete-ike!" (MK Taxi! Get the hell out of Japan!)

Three years later, MK is still here, still run by the Sadao clan, and still battling officialdom in its quest to transform the public's perception of the nation's taxi drivers. @