Didi Chuxing and SoftBank have made a deal to dominate Japan’s taxi market | Source: Shutterstock

China’s Didi Chuxing takes aim at Japan’s taxi market

CHINESE ride-hailing giant Didi Chuxing has announced a partnership with Japanese telecom firm SoftBank to develop a taxi app in Japan, a market where rivals such as Uber have struggled to make inroads.

Didi currently dominates the Chinese market and has raised almost US$20 billion, including a US$4 billion round for global expansion which closed in December.

Boosting its presence in markets outside of China seems to be a large priority for Didi at the moment. The company has recently bought a Brazilian app in January, as well as previously making acquisitions in both India and the United States.

“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 Chinese firm said in an announcement.

The platform will focus on taxi drivers and taxi operator firms since peer-to-peer ride services are not yet legal in Japan.

Ride-hailing apps have found it tough to crack the Japanese market thus far, with hailing a traditional taxi in the country rarely taking more than a few seconds. Furthermore, a very small percentage of taxis are connected to a smartphone.

The partnership between Didi and SoftBank adds even more heat to the already heavily competitive relationships between ride-hailing services in Asia.

SoftBank recently became Uber’s largest shareholder with a 15 percent stake in the company. Yet, the Japanese company has also backed Uber’s rivals Ola and Grab in the past.

The SoftBank-Didi partnership reaches new levels of complication, creating a new competitor in a market where Uber operates.

The deal between Didi and Softbank arrives a day after carmaker Toyota announced an investment of US$69 million in the JapanTaxi app, which claims to be the biggest ride-hailing app in Japan.