Uber Technologies Inc. said Tuesday it will start its first taxi-hailing service in Japan this summer on a western island, targeting foreign tourists and residents, in a step toward a full-fledged entry into the country's huge taxi market.

In collaboration with the Hyogo prefectural government, the pilot project on Awaji Island will run through the end of next March by using local taxi operators invited through a tender. Users will ride the hailed taxi within the island in principle, it said. Uber, which has been in talks with over 20 taxi companies nationwide for business tie-ups, hopes the project on Awaji Island will provide insights as it looks to expand its business ahead of the 2020 Tokyo Olympics and Paralympics, said Brooks Entwistle, Uber's chief business officer for international operations.

Awaji Island, located about 30 minutes from Kobe in Hyogo Prefecture and within an hour from Osaka by car, has a population of around 140,000. Tourism agencies are promoting its natural environment, cuisine and hot springs.