China’s Didi Chuxing and SoftBank Group Corp will roll out a venture in Japan later this year to provide ride-hailing services, amid a global battle to control the technology increasingly central to urban transport.
The move into Japan 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 taxi companies are lobbying hard against deregulation.
In Japan, ride-hailing companies face strict rules that effectively bar non-professional drivers from offering taxi services on safety grounds, and are limited to services that “match” users to existing taxi fleets via mobile platforms.
The two firms said in a statement they aim to trial matching services in Japan this year. 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.
Tech-based disruptors like Didi and Uber 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 expanded overseas rapidly in the past year since sealing its dominance in China with the purchase of Uber’s local unit in 2016, ending a cash-burning subsidy war that cost the U.S. 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 sources 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.
Tech vs Cars
SoftBank itself holds stakes in Didi, Indian rival Ola and Southeast Asia’s Grab. Last month the Japanese firm became the largest shareholder in Uber.
SoftBank founder Masayoshi Son said this week that given the shifts in the auto market, car-hailing platforms “may have bigger value than the automobile itself” in the future.
Ride-hailing firms see Japan as a potentially lucrative market and are pressing regulators to ease stringent rules. Uber’s new Chief Executive Dara Khosrowshahi will meet with regulators there on his first visit to Asia later this month.
On Thursday Toyota Motor Corp said it would take a stake in taxi-hailing service JapanTaxi, set up by Japan’s largest taxi firm Nihon Kotsu whose president, the “prince of taxis” Ichiro Kawanabe, has vigorously opposed any deregulation.
Didi is also trying to diversify at home. This week it announced an electric car-sharing service with 12 automakers, including local partners of Ford Motor Co and the alliance between Renault SA, Nissan Motor 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 Tokyo.
SoftBank, Yahoo Japan plan e-commerce push
SoftBank Group Corp, Yahoo Japan Corp and Aeon Co Ltd plan to launch an online retail business, national broadcaster NHK reported on Friday.
The online business will sell products including food, clothes and everyday goods, NHK said citing unnamed sources, in what would be the latest tie-up between companies in Japan looking to bolster their online offerings as they face stiffer competition from Amazon.
Representatives of the three companies were not immediately available to comment.
The tie-up would allow the companies to share SoftBank and Yahoo Japan’s customer base and data analysis abilities with Aeon’s wide product range and distribution network, NHK said.
SoftBank could provide labor-saving robotics to Aeon stores, NHK said without giving further details.
Last month Walmart and Rakuten Inc said they would launch an online grocery delivery service. Seven and i Holdings Co Ltd, operator of Japan’s largest chain of convenience stores, announced last year it would cooperate on fresh food delivery with Askul Corp.
Amazon is increasing its range of services in Japan, trialing its “Fresh” food delivery service in parts of Tokyo, and opening a large photography studio in Tokyo this spring as it moves to ramp up its fashion range.
