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Taxi-hailing push: China's Didi-SoftBank JV aims to make inroads into Japan

The move into Japan underscores a recent push by Didi to beef up its presence in markets outside China

Reuters  |  Shanghai/Tokyo 

cabs, taxis, cars
Representative Image

China's and Group Corp will roll out a venture in later this year to provide ride-hailing services, amid a global battle to control the technology increasingly central to urban transport.

The move into underscores a recent push by Didi to beef up its presence in markets outside China, although it will face challenges to expand its services in a country where existing are lobbying hard against deregulation.

In Japan, ride-hailing face strict rules that effectively bar non-professional drivers from offering services on safety grounds, and are limited to services that "match" users to existing fleets via mobile platforms.

The two firms said in a statement they aim to trial matching services in this year. is an investor in Didi, which raised $4 billion to fund its global push in December at a valuation of more than $50 billion.

Tech-based disruptors like Didi and Technologies Inc, as well as traditional carmakers, are all looking to get ahead in the ride-hailing market, amid a global shift in the auto industry towards car sharing, autonomous driving and electric vehicles.

Didi has rapidly expanded overseas in the past year since sealing its dominance in with the purchase of Uber's local unit in 2016, ending a cash-burning subsidy war that cost the US firm roughly $2 billion.

The Chinese firm is, however, facing rising challenges at home, including a slower pace of growth, new rivals entering the market and drivers complaining that reduced subsidies mean they are working longer hours for the less pay.

In January Didi agreed to acquire control of Brazil's 99, in a deal source said valued 99 at over $1 billion and gave Didi a "significant majority" stake in the Brazilian firm.

The Chinese company is also looking to break into Mexico and is expanding its presence in regions outside the Chinese mainland, including Hong Kong and Taiwan.

"I can see that in a year from now, if you're a Chinese outbound traveler, that everywhere you go you'll have the option of using Didi to find a ride, and that helps them secure their existing customer base," said Kirk Boodry, analyst at New Street Research.

Tech vs cars

holds stakes in Didi, Indian rival Ola and Southeast Asia's Grab. Last month the Japanese firm became the largest shareholder in

founder said this week that given the shifts in the auto market, "may have bigger value than the automobile itself" in the future.

Ride-hailing firms see as a potentially lucrative market and are pressing regulators to ease stringent rules.

Uber's new Chief Executive will meet regulators there on his first visit to later this month.

On Thursday said it would take a stake in taxi-hailing service JapanTaxi, set up by Japan's largest firm, Nihon Kotsu, whose president, "of taxis" Ichiro Kawanabe, has vigorously opposed deregulation.

Didi is also trying to diversify at home. This week it announced an with 12 automakers, including local partners of Ford Motor Co and the alliance between Renault SA, Co Ltd and Mitsubishi Motors Corp.

Didi and SoftBank's trial service, which will leverage Didi's "deep learning-based demand prediction and smart dispatch systems", will initially roll out in cities including Osaka, Kyoto, Fukuoka and

First Published: Fri, February 09 2018. 23:55 IST
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