Instant noodles paying for your taxi ride?
Ride hailing companies, such as Grab, Uber or Didi, are having a tough time in Japan. Not only because of the country’s strict regulation mandating a fixed rate pricing, but also due to the omnipresent taxi lobby that is using every argument within its power to keep the new players out of the country.
As a result of the ban on ride hailers, the competition surrounding taxi booking applications has been intensifying. Technology players consider the app business as the only entrance into the lucrative, 1.7 trillion Yen (13.5 billion USD) sector; obviously, revenue streams in scope are data and publicity.
NTT DoCoMo, one of the largest mobile phone network operators in Japan, has launched the moderately successful “JapanTaxi” application which has been downloaded 5 million times (for a total population of 126.8 million people). To put this figure in perspective, the Grab app has been downloaded 45 million times in 2017.
Sony, as well as Softbank and Uber are working hard to obtain their share of the Japanese booking business, but are facing heavy pushback from the taxi industry. Softbank especially has been investing massive amounts in ride hailing and booking applications around the world (Uber, Didi, Grab, Ola, 99,…), but hasn’t managed to conquer its home country.
Free of charge
It was a complete surprise to see DeNA (DNA), an e-commerce and gaming company with additional activities in the network industry, venture into the taxi business. DeNA had been rather quiet before, except for a collaboration with Nissan to develop a self-driving taxi, announced in February 2018 and a previous collaboration with the French autonomous vehicle company EasyMile. No one however expected DeNA to come up with a total innovation: free taxis.
Users book a taxi on DeNA’s mobile phone app, called “MOV” or “MOB” (depending on how to translate from Japanese to English). The application will inform the user when the taxi will be arriving as well as some identifiers (plate number, etc.). The user doesn’t have to pay for the ride; DeNA is using advertisements, displayed on the taxi itself as well as on screens present inside the taxi, to cover for the legally fixed taxi fares.
The taxi drivers receive information about events, traffic, weather and will even benefit from a predictive service suggesting an optimum route helping them to maximise the number of rides. DeNA has been testing its booking tools and predictive routing successfully with about 5,500 taxis since April 2018. The taxi companies using DeNA software have increased the number of customers 5 to 6 times in comparison with other taxi companies.
Tests are being done now with 50 cars, sponsored by Japan’s extremely popular Nissin Food, that will advertise its range of instant noodles in the posh Minato-ku and Chuo-ku areas in and on the cars. The company aims to extend its network, both in number and geographically, to 4000 units in 2019.