TOKYO (Kyodo) -- A Chinese man has been arrested on suspicion of operating an unlicensed taxi service by leasing vehicles from a chauffeur service company that he effectively managed to non-employees to illegally transport customers, police said.

Wang Xiaoyu, 41, is suspected of violating the Road Transportation Act for leasing vehicles in the company's name for commercial use.

The vehicles were registered as "urban hire" vehicles. The transportation category was introduced in 2014 and requires passengers to reserve service in advance and have a charter contract of a minimum of two hours.

Authorized commercial vehicles are identified by green license plates in Japan. But police authorities widely view the plates as easily exploitable as it is difficult to know if vehicles using them are operating illegally by appearance alone.

Wang was arrested on Sunday for allegedly lending green-plated vehicles under the name of Phoenix Kokusai to non-employees, who then operated unlicensed taxi services by transporting Chinese tourists and others between February and April this year.

Wang has partially denied the allegations.

The Tokyo Metropolitan Police Department believes Wang received around 38 million yen ($233,000) from 18 drivers as a fee for use of the firm's name between November in 2024 and May in 2026.

The investigation was launched following complaints from other taxi drivers that urban hire vehicles were illegally soliciting passengers at Tokyo's Haneda airport.

The police have also arrested three drivers, all Chinese nationals, on suspicion of violating the Road Transportation Act.

According to the Ministry of Land, Infrastructure, Transport and Tourism, the number of registered urban hire vehicles increased from 3,868 in fiscal 2013 to 8,850 in fiscal 2024 amid a surge in inbound tourism.