TOKYO—Uber plans to ramp up its business in Japan, a wealthy country full of potential customers, even though it is barred from offering its core ride-hailing service there.

The company is running pilot programs to turn Japan's declining population into a business opportunity. Uber aims to turn the elderly into Uber drivers to help the housebound get around town.

Uber brought UberEats to parts of Tokyo on Thursday, betting that the food-delivery service could be a big money spinner for the company.

"We have high hopes that Japan will become a big market for Uber," said Masami Takahashi, president of Uber Japan.

Globally, Uber has been focusing on trimming losses and ramping up revenue ahead of an eventual public offering.

It may also be that there is more money to devote to fighting battles from India to Southeast Asia—and to finally get a leg up in Japan.

Last month, Uber merged its China operations with rival Didi Chuxing Technology Co., a country where it burned through millions of dollars trying to gain traction. At the time, Uber Chief Executive Travis Kalanick said the merger freed up cash "for bold initiatives focused on the future of cities—from self-driving technology to the future of food and logistics."

Japan's densely-populated cities, wealthy population and low car-ownership are a potent mixture for a company like Uber. But the company is hamstrung by what Mr. Kalanick once called "Byzantine and complicated regulations" that require Uber drivers to have taxi licenses.

Uber also faces opposition from taxi unions that "feel threatened" by ride-hailing services, said Hitoshi Sato, an analyst at InfoCom Research in Tokyo.

Uber operates its high-end UberBlack limousine service, and links up its UberTaxi service with local taxi companies. In a sign of how slow the company's growth has been over the past two years, a rival app from the local taxi union, the Tokyo Hire-Taxi Association, often has more cars on the road.

Uber taxis also cost the same as those hailed on the street, reducing the incentive to use the app.

The head of the Tokyo Hire-Taxi Association, Ichiro Kawanabe has said in the past that there was no need for Uber's services in Japan because taxis were easy to hail and competitively priced.

The growth in Uber's taxi service has been slowed by opposition from some taxi drivers—who are around 60 years old on average—to learning how to operate the technology, said Mr. Takahashi.

Japanese users also seem to prefer UberBlack despite being pricier, Mr. Takahashi said, because they want others to know they are being picked up in an Uber.

The startup, which has been known to clash with regulators, has taken a different route in Japan. It registered a travel agency, acting as a dispatch service rather than trying to upend the taxi industry.

The Japan arm turned out to be something of a trendsetter for the now kinder, gentler image Uber is honing as it focuses on compromise and working with local governments to expand its services.

To roll out its pilot ride-hailing program in rural Japan in May this year, the company had to get around Japan's ban on private-car owners acting as taxi drivers. Uber worked through local government officials in Tango—population 6,000 and falling—who wanted Uber's services. The local government wrung a compromise out of the transport ministry, which said Uber users could use private cars in areas where there were no public-transportation options.

But the food-delivery business is a low-margin one and building a business around a declining rural population presents its own challenges. Uber will have to figure out how to get its ride-hailing service going if it wants to earn cash commensurate with the size of Japan's economy.

"Uber wants to be everywhere," Mr. Takahashi said. "There's no reason why we shouldn't be everywhere in Japan. That's my end goal."

Japan's transportation ministry doesn't appear to be warming to Uber's main ride-hailing service.

Transport Minister Keiichi Ishii said in an interview the company was welcome to work with licensed taxi services, but running the American-style service "would be pretty difficult under Japan's current legal system."

Mr. Ishii said the ban was to ensure passenger safety. "People who are acting as intermediaries on the internet and make it their business merely to introduce drivers don't have a single person to manage those drivers," he said.

Uber's Mr. Takahashi has an eye on the 2020 Olympics, as the government hopes to reinvigorate the economy by boosting tourism and promoting technological innovation.

"When everyone comes to Japan and Tokyo, I would love to be able to show a Japan that has embraced different types of innovation," Mr. Takahashi said.

Alexander Martin contributed to this article.

Write to Sean McLain at sean.mclain@wsj.com

(END) Dow Jones Newswires

September 30, 2016 08:55 ET (12:55 GMT)

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