By the end of April, users of Uber Eats will be able to pay for orders using the credit card linked to their Rakuten ID.
They can earn Rakuten Points, a reward programme run by Rakuten Group, as well as use the points to pay for purchases.
Users will also be able to sign up for Uber Eats with their Rakuten ID.
In a recorded video message, Uber CEO Dara Khosrowshahi said the tie-up was a result of years of talks between him and Rakuten CEO Hiroshi Mikitani.
Rakuten has been a major investor in Lyft, Uber’s ride-hailing rival in the US, since 2015, but Mikitani stepped down from Lyft’s board in 2020.
Rakuten last year transferred its food delivery operation to Gurunavi, a Japanese restaurant booking site that counts Rakuten as a shareholder.
The move signalled that Rakuten was scaling back ambitions of building its own delivery business.
“Today is exciting, but it’s only our first step,” Khosrowshahi said.
“We look forward to the beginning that we’re celebrating today, as well as the journey that we are going to take with Rakuten in partnership both in Japan (and) beyond.”
The move comes amid intensifying competition in Japan’s food delivery market.
Uber’s biggest rival Demae-can said last week that net loss for the September 2021 to February 2022 period more than doubled from the previous year from ¥9.8 billion to ¥22.9 billion.
Demae-can’s revenue, however, also doubled to ¥22.7 billion.
Uber Eats launched Japanese operations in 2016 and has taken a lead in online meal delivery during the Covid-19 pandemic, signing up about 150,000 merchant stores and 100,000 couriers.
Japan is one of Uber’s biggest food delivery businesses in Asia.
The US company has sold its unit in India and shut down the service in South Korea and Hong Kong.
This year is likely to be challenging for food delivery in Japan after Tokyo and other major cities lifted Covid-related restrictions – such as limiting the number of people that can dine together – ahead of the Golden Week holiday starting at the end of this month.
Yukiko Muto, president of Uber Eats Japan, said the speed of growth may slow but stressed that there is still a large potential because food delivery penetration in Japan remains low.
For Rakuten, the tie-up is a chance to lure users into its ecosystem of online services as the payments battle heats up in Japan.
Rakuten is Japan’s largest credit card issuer at 25 million cards, but is playing catch up with SoftBank Group’s PayPay system in QR code payments, which are catching on fast in retail stores.
PayPay, which quickly gained market share through lavish promotions and by slashing merchant fees, is stepping up efforts to become profitable as it eyes an initial public offering.
According to a survey by Japanese marketing research company MMDLabo, Rakuten Pay was the second-most popular QR code payment app in the country, with 16.7% of respondents saying they use it most frequently.
While PayPay was the dominant leader with 45.4% of the market, Rakuten Pay gained 1.9 percentage points from the previous survey in July.