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Business deals

Toyota pumps $68m into Japanese taxi-hailing app

JapanTaxi faces competition from the likes of Uber and Didi Chuxing

Japan has proved a tough market for ride-hailing apps like Uber as taxi companies dominate.

TOKYO -- Toyota Motor will invest 7.5 billion yen ($68.8 million) in the company behind a taxi-hailing app here under a deal announced Thursday.

The automaker will acquire newly issued shares in JapanTaxi through a private placement this month and collaborate with the Tokyo company in such areas as data collection and analysis and in-vehicle terminals.

The partners aim to jointly develop a new dispatch support system by fiscal 2018. Powered by artificial intelligence, the system will analyze data to find peak-demand times and locations, helping to make ride-hailing more efficient.

The deal comes amid moves by international ride-hailing companies into Japan. U.S.-based Uber Technologies is focusing on taxi-hailing here amid regulatory and other headwinds to its mainstay contract-driver-based business model. Chinese counterpart Didi Chuxing will roll out a cab service in Japan as early as spring.

JapanTaxi -- part of the Nihon Kotsu group, one of the country's biggest taxi companies -- intends to make its nationwide platform more user-friendly and expand its network of roughly 60,000 cars.

As consumers shift away from vehicle ownership, Toyota has partnered with Uber and Singapore's Grab in search of new transportation services.

The collaboration with Uber has faced pushback from Japanese taxi companies. But Toyota has also tried to strengthen ties with the industry, with which it has developed a new hybrid model.

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