Biz / Tech

Didi moves into Japan as expansion efforts continue

China's largest ride-hailing company Didi Chuxing said it would team up with Japanese conglomerate Softbank Group to target the taxi-hailing market.

China's largest ride-hailing company Didi Chuxing said it would team up with Japanese conglomerate Softbank Group to target the taxi-hailing market.

The two parties are also in discussions about creating a joint venture which would focus on taxi drivers and taxi companies as peer-to-peer ride services are not legal in Japan.

“Didi and SoftBank will diligently study local market conditions and policies, and will actively engage with industry practitioners, policymakers and other stakeholders, with the aim of building an open and inclusive platform that will be available to all of Japan’s taxi operators,” the statement said.

Japan forbids the offer of ride hailing from non-professional drivers and the taxi-hailing market is limited to services that link users with existing taxi fleets through mobile software. 

The move came as the Chinese company has been seeking overseas expansion through tie-up and investment deals in a number of countries spanning from South America to Southeast Asia.

Didi is facing rising challenges in the domestic market with new players entering the market and slower organic growth due to rising operation costs.

The two companies aim to trial matching services in Japan this year, and are planning to start pilot programs in Osaka, Kyoto, Fukuoka, Tokyo and other locations.

Earlier this month it launched DiDi Hong Kong after operating under Kuaidi Taxi brand for three years to upgrade its ride-matching technology and ensure user experience and route planning. It already covers 20,000 Hong Kong taxi drivers, or more than half of the city's fleet.

Softbank was also an existing investor in Didi as the Chinese company said in December it has raised US$4 billion in funding from domestic and overseas investors as the company seeks to step up international expansion and new energy vehicle initiatives.

Didi's other overseas investments cover a wide number of areas and regions spanning over 1,000 cities, including the US, Latin America, Europe and the Middle East as the company seeks to extend its footprint outside of China since the acquisition of Uber's China operations in 2016.

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