China’s largest taxi-hailing service, Didi Chuxing, has officially launched its taxi-booking service operations in Japan. The new service has gone live in Osaka and parts of the surrounding Kansai area, including the Kansai International Airport. Didi’s new app will allow passengers to connect with 10 different local taxi companies and the company says that it will use an AI-based dispatch and fleet management system for efficiency.
Didi Chuxing, which is valued at $56 billion, entered Japan in partnership with SoftBank, which is one of its investors. The company plans to expand its services to include Tokyo, Fukuoka and Kyoto and will expand to other cities across the country in the future as additional taxi companies are registered into the Didi Japan service.
Didi Japan’s home screen
The chauffer and taxi industry in Japan is big business, with some of the highest taxi rates in the world. The country is the world’s third largest taxi market based on revenue and has 240,000 licensed taxis. Japan’s legal regulations prohibit private cars from providing chauffer and taxi services, so Didi Japan’s growth strategy is based upon it developing relationships with licensed taxi companies.
Didi’s entry into Japan, in cooperation with SoftBank comes at a time when both international and Japanese taxi-share companies look at how they can become active in Japan.
Nihon Kotsu, Japan’s largest taxi operator, has created an app, “JapanTaxi” that allows consumers to connect to more than 61,000 taxis covering all 47 prefectures of Japan. Using a smartphone, consumers make a reservation, find out the fare instantly and can then pay online using a variety of payment options.
The JapanTaxi app has had more than 4 million downloads and is said to reach 25% of people who regularly take taxis for business and personal use. JapanTaxi has received investment from a variety of companies with Japan’s largest automobile manufacturer, Toyota, being the lead investor of a recent $69 million funding round.
Toyota, which is also an investor in Uber, said it invested into JapanTaxi to enhance “cooperation and business collaboration in such areas as connected terminals for taxis, the joint development of vehicle-dispatch support systems, and big-data collection.”
Didi Japan’s app in use
When it comes to customer acquisition and retention, Didi Japan has a unique business strategy that will see the company focus on Japanese traveling overseas, and foreigners visiting Japan.
The company has created a ‘roaming passport’ that will allow users of other Didi apps — including people living in Australia, China, Hong Kong, Mexico and Taiwan — to use their regular Didi app in Japan. At the same time, the company is appealing to Japanese travelers to use its app when they travel to countries in Didi’s network.
A spokesperson for Didi Japan said that the company would add additional countries into the network and analyzed Japanese outbound travel patterns and needs. The company will also evaluate whether it can offer other services in the future through the Didi Japan app that will benefits its customers and users.