Didi Ties Up With SoftBank to Give a Lift to Japanese Taxi Companies

Chinese ride-hailing giant Didi Chuxing Technology Co. is teaming up with SoftBank Group Corp. 9984 0.40% to help Japan’s taxi industry deploy cars more efficiently, in a move likely to stymie the ambitions of Uber Technologies Inc. in the country.

Didi said on Friday it will set up a joint venture with SoftBank’s Japanese telecom unit to adapt its ride-hailing platform for local taxi companies, which have been slow to adapt new technologies. The two companies said they would begin trial services in Tokyo, Kyoto, Osaka and Fukuoka within the year.

Didi, which is already working with Daiichi Taxi Co. on a way to allow Chinese tourists to use its app in Japan, plans to work with multiple taxi companies, according to two people familiar with the matter. The Chinese ride-hailing firm will name three members of the joint venture’s management team, including the chief executive, one of them said.

SoftBank, which arranged Didi’s partnership with Daiichi Taxi, is the biggest investor in Uber, having invested $7.7 billion last month to take a 15% stake. The Japanese conglomerate has also sunk more than $9 billion into Didi.

SoftBank believes Didi is in a better position than Uber in Japan because of the large number of existing Didi users visiting the country, according to a person familiar with SoftBank Chief Executive Masayoshi Son’s thinking. Transport Ministry officials have welcomed Didi’s partnership with Daiichi Taxi, saying it will improve services to Chinese visitors and help cut demand for unauthorized Chinese ride-hailing apps in Japan.

Japan’s large fleets of taxis and generally high-quality service and dense public transportation networks have flummoxed Uber. Ride-hailing apps continue to face strong opposition from government officials, who cite safety and liability concerns, as well as the taxi industry and auto makers.

Toyota Motor Corp. on Thursday said it is pumping ¥7.5 billion ($69 million) into a taxi-hailing app called JapanTaxi, set up by taxi firms to fight Uber’s attempts to break into Japan.