TOKYO (Kyodo) -- A joint venture set up by mobile phone carrier SoftBank Corp. and Chinese car-sharing giant Didi Chuxing Technology Co. said Wednesday it has expanded its taxi-hailing services to Tokyo and Kyoto amid intensified competition in the market.
The venture Didi Mobility Japan Corp. said its services, powered by artificial intelligence technology, started in the two cities Wednesday in addition to Osaka, where the operation began in September. Services will expand to 10 other cities including those in Hokkaido, Hyogo and Fukuoka prefectures by March 2020.
Didi Mobility, set up in June, is targeting the growing number of Chinese tourists in Japan and the younger generation.
Meantime, rivals including a Sony Corp. venture and leading U.S. ride-sharing giant Uber Technologies Inc. also offer taxi-hailing services in Japan, where more than 230,000 taxis are in operation.
The new entrants to the taxi segment are positioning themselves to respond to the planned deregulation of the industry by the Japanese government to promote ride-sharing services, which are currently banned in most areas. The government also plans to relax rules on taxi usage, allowing customers to share taxis with strangers.
"We hope to raise the operating rate of taxis to around 60 percent from the current national average of some 40 percent," Didi Mobility Senior Vice President Keigo Sugano told a press conference. "Using AI technology, we seek to effectively match passengers and taxis."
With the service, taxis will be equipped with Didi's technology, which will receive information on the nearest customer seeking a ride. When hailing a taxi, users can designate both their current location and destination through a Didi application.
Payments can be made via smartphone apps, such as the PayPay digital money service. Users of the Chinese version of the DiDi smartphone app can pay through the Alipay and WeChat Pay methods.
At present, ride-sharing services that match drivers of personal vehicles with people seeking transportation are prohibited in Japan except in areas where no public transportation is available, because of strong opposition by the taxi industry to relaxing the regulations.
Only residents in depopulated areas are allowed to use such ride-sharing services, typically managed by local governments and nonprofit organizations.