UBER Technologies is looking to team up with Elon Musk’s Tesla to enter Japan’s taxi market, the Nikkei newspaper reported.

The ridesharing company aims to capitalise on a recent decision by the Japanese government to begin introducing ridesharing in parts of the country in April. A severe shortage of taxi drivers is putting pressure on the ageing country to rethink its restrictions at a time when inbound tourism is picking up.

Uber will initially roll out 30 Tesla Model Ys, increasing that to 100 electric cars during 2024, the report said. Pricing will be roughly 20 per cent higher than the typical cost of a local taxi, according to the Nikkei.

Uber operates taxi services in 33 countries and regions, including an “Uber Green” service in North America and Europe. It aims to invest US$800 million worldwide to support the shift to electric vehicles, and become fully electric in US and Canada by 2030 and globally by 2040. BLOOMBERG