Toyota has announced that it will be investing $68.8 billion in a Tokyo taxi-hailing app.
The automaker will be investing in shares in JapanTaxi through a private placement this month. The two companies will collaborate in areas such as data collection and analysis. By utilizing artificial intelligence, the new dispatch support system will analyze data to find peak-demand times and locations. This, in turn, will make the ride-hailing company more efficient.
JapanTaxi is part of the Nihon Kotsu group, which is one of the largest taxi companies in the country. The ride-hailing service intends to make its nationwide platform easier to use for customers. The company also plans to expand its network of about 60,000 cars.
Even though Japan produces about 7.83 million passenger vehicle every year, the area is seeing a large shift away from vehicle ownership. Because of this, Toyota has decided to partner with Uber and Singapore’s Grab in search of alternative transportation services.
Unfortunately, Japanese taxi companies have had a negative response to the automaker’s partnership with Uber. But Toyota has pressed on and has tried to strengthen ties with the industry. The funding Toyota is putting into these ride-hailing services is said to go towards furthering the development of the services.
According to Toyota, it plans “cooperation and business collaboration in such areas as connected terminals for taxis, the joint development of vehicle-dispatch support systems, and big-data collection.”
While Uber does not provide business information for its business in Japan or other Asian markets, it is said to account for under 1% of Tokyo’s taxi market. On the other hand, JapanTaxi claims four million downloads of their app and about one-quarter of all taxi drivers in Japan.
Japan bans peer-to-peer rides, which makes ride-hailing services so popular. Messaging app Line is another taxi services competitor in the area. Line’s hailing service can be conveniently utilized within its app, which is Japan’s most popular app for messaging. However, it is unclear how well the company is doing in today’s market.
Many taxi companies are competing for the top spot in Japan’s ride-hailing market. With Japan’s taxi industry being one of the largest, at $15 billion each year, it’s no surprise so many companies are competing for the top spot.