Japanese tech giant Sony Corporation recently announced that it would invest in building an AI-based ride system. That technology would partner with five separate taxi companies and use AI to manage dispatches and predict demand based on a variety of factors.
Sony wants to build this AI-based technology alongside Daiwa Motor Transportation Co. Ltd as well as the five yet unnamed domestic taxi services. And as for the AI technology itself, the company has already tested it out on Aldo the Robot Dog.
The partnership represents a growing trend in investments between taxi companeis and tech companies. Those tech companies are starting to see Japan as a more prosperous ride-sharing market, even despite its recent history struggling with services like Uber.
The deal between Sony and these five cab companies would also require some sort of policy change in order to come to fruition. Currently, non-professional drivers cannot offer taxi services due to safety. Ride-hailing and sharing companies are restricted back to services that "match" users in existing fleets by mobile devices and platforms.
Uber's new CEO Dara Khosrowshahi said neglecting to build relationships simply couldn't work for Uber's new international reach and expansions.
"It is clear to me that we need to come in with partnership in mind and in particular partnership with the taxi industry which actually has a very, very strong product."
"It is clear to me that we need to come in with partnership in mind and in particular partnership with the taxi industry which actually has a very, very strong product," he said without providing specifics. "But that product hasn’t kept up with technological change."
Uber's newest chief executive Khrosrowshahi noted that if Uber wants to be successful, tbose parties will need to open its doors to new partnerships.
"I saw Japan as an incredible opportunity, and when I asked the team why wasn’t our Japan business larger, I started learning the history of our approach to Japan, and it was an approach that frankly didn’t work," Khosrowshahi said. He was speaking with Roos, a co-founding partner at Geodesic Capital, an Uber investor.
Japan has one of the most impressive taxi markets in the world, valued at over $16 billion. Uber only holds 1 percent of that figure, and more ridesharing services are predicted to crowd out Japan's taxi market.
This is also far from the only major investor partnering with taxis for app investments. Toyota Motor Corp. announced earlier this month that it would invest more (approximately $68.6 million) into a company called Japan Taxi.
“The question is what does Toyota think about ride-sharing,” said Seiji Sugiura, an analyst at Tokai Tokyo Research Center in Tokyo. “Now that Toyota has invested in Japan Taxi, the issue to look at is Uber’s expansion and strategy in Japan.”