Didi Chuxing Joining Hands with SoftBank to Step into Japanese Taxi-Hailing Market

Uber was struggling to make inroads in Japan.

Photo by Alain Pham on Unsplash. Modified by KrASIA.

SoftBank and Didi Chuxing, China’s biggest ride hailer announced a partnership Friday to provide taxi-hailing platform services in Japan, the service will be introduced first in Osaka, Kyoto, Fukuoka, Tokyo among other cities.

They also plan to set up a joint venture in the country. Didi will appoint three senior execs including the chief executive at the JV, according to Chinese biztech media 36Kr (in Chinese).

Didi expects to bring more efficiency to Japanese taxi industry by leveraging on its AI technologies that enable demand prediction and smart dispatch systems.

With SoftBank’s help, Didi plans to actively engage with industry practitioners, policymakers and other stakeholders to shun regulation pitfalls. And starting from taxi-hailing instead of ride-sharing, is probably a lesson well learned from Uber.

Image credit to 123rf.com.cn

The US company has been struggling to make inroads into Japan, as local authorities slammed on the brakes after Uber launched a pilot service in 2015. The company then shift to taxi-hailing service as an Uber spokesman puts it, the company’s priority in Japan was to “partner with taxi companies to get licensed drivers using the app to connect with riders”. However, there are 50,000 taxis in Tokyo alone, and Uber holds a petit less than 1 percent market share in the city.

Didi is at it with a series of moves to extend its tentacles outside of the home market. One month into 2018 it has bought out Brazil’s 99 to tap into a rising Latin American ride-hailing market, and started to offer self-branded services in Hong Kong recently.

Read more: Analysis: By Acquiring Brazilian 99, Didi Sets a Foothold in Latin America, Where Escalated War Between Uber and Didi Is Expected

Didi has also invested globally in ride-hailing regional leaders, including Singapore-based Grab, U.S.-headquartered Lyft, India’s Ola, Taxify in central and eastern Europe and Careem in the Middle East. These companies are also Uber’s regional rivals.

At home, Didi is facing rising challenges from newcomers in the industry, including Meituan-Dianping and Mobike who have both launched their ride-sharing services and have partnered up in the latest investment.

SoftBank is an existing investor in Didi, which raised $4 billion to fund its global push in December at a valuation of more than $50 billion. Didi-Chuxing is the #2 most valuable startup only after Uber, according to CB Insights.

Editor: Ben Jiang