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Sharing Economy

DeNA launches free cab-hailing service

Internet company looks to tap shift away from car-ownership

The fares for DeNA's free taxi rides will be covered jointly by the company and sponsor Nissin Foods. (Photo by Shihoko Nakaoka)

TOKYO -- Japanese online service developer DeNA launched a free car-hailing campaign on Wednesday, in a bid to catch up with bigger competitors in an increasingly crowded market.

The free rides will be available on 50 vehicles covered with ads for instant noodles from sponsor Nissin Foods Holdings, with the fares paid for by the advertiser and DeNA. The taxis can be hailed only in central Tokyo but can take passengers to any part of the capital's 23 wards.

With private-vehicle ride-hailing services banned in the country, many companies are looking for innovative ways to tap the growing shift away from car ownership.

DeNA aims to tie up with sponsors in a wide range of businesses down the road. The company is also considering arranging rides when users make restaurant reservations. Another idea is to synchronize with a calendar app so that transportation is planned around users' schedules.

With the free-ride campaign, which runs through the end of the month, "we can connect with people who don't normally take taxis," said Hiroshi Nakajima, who heads the company's automotive business. "Taxi operators can also expect a reliable source of income."

The free rides will be provided through the company's Mov app, which services a fleet of around 4,000 vehicles from five partner taxi companies. All users need to do is specify the pickup location and choose a cab on a map on its app. Information like the taxi's estimated time of arrival and license plate number will be displayed on the app.

Starting in the second half of 2019, DeNA plans to provide information for taxi operators to help improve fleet utilization, supplying artificial intelligence-powered projections of demand based on the time of day, weather and planned events in an area. Best routes will also be shown.

The service's Tokyo debut follows the April rollout in neighboring Kanagawa Prefecture with a fleet of about 5,500 taxis. Partner taxi operators report their number of trips is five to six times higher than that of other companies.

Expansion to the greater Osaka region is planned for next spring.

The ride-hailing market is getting crowded. The pack is led by JapanTaxi, part of the Nihon Kotsu group that has Toyota Motor and mobile carrier NTT Docomo among shareholders. It boasts a fleet of some 70,000 vehicles -- a third of all taxis on the road in Japan. Seeking to tap the foreign tourist trade, JapanTaxi has tied up with South Korean internet company Kakao. Starting Thursday, visitors from that country will be able to book rides in Japan through the same cab-hailing app that they use back home.

Another camp is headed by Sony, which formed a joint venture with five fleet operators in May to build a taxi-dispatch platform, with the goal of expanding to some 90,000 vehicles in five years.

Because ride-sharing services are banned in Japan, foreign giants in this industry are taking an unusual approach of partnering with taxi operators, their archrivals in many other markets. Uber Technologies said Sunday that it will launch a cab-hailing service in Osaka through a partnership with a taxi company around January, expanding its presence beyond Nagoya. Players in Osaka already include China's Didi Chuxing Technology, in a tie-up with SoftBank Group.

"Mobility as a service," or MaaS, is expected to grow into a $1.4 trillion industry in the U.S., Europe and China by 2030, PwC Consulting projects.

In particular, taxi-hailing and ride-sharing services are predicted to become some of the first commercial applications of autonomous driving technology. Waymo, the self-driving technology development member of the Google family, is set to roll out a taxi-hailing service. General Motors is charting a similar path by developing self-driving vehicles with Honda Motor.

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