Toyota invests $69M in Japanese Uber rival backed by the taxi industry

This week isn’t turning out to be great one for Uber in Japan. Two of its investors — Didi and SoftBank — are teaming up to launch a rival service, while one of its existing competitors has just landed a big cash infusion and highly influential backer after Toyota backed JapanTaxi.

The auto giant said it will invest 7.5 billion JPY ($69 billion) into JapanTaxi, an Uber-like service that is owned by Ichiro Kawanabe, who runs Japan’s largest taxi operator Nihon Kotsu and heads up the country’s taxi federation.

Toyota is also an Uber investor and it previously backed JapanTaxi via $4.5 million investment from its Mirai Creation Fund, according to Bloomberg.

These new funds will go towards developing the service further, while Toyota said it plans “cooperation and business collaboration in such areas as connected terminals for taxis, the joint development of vehicle-dispatch support systems, and big-data collection.”

Uber doesn’t provide business information or user numbers for its business Japan or other markets in Asia. However, it is said to account for less than one percent of Tokyo’s taxi market. JapanTaxi, meanwhile, claims four million downloads and 60,000 taxis — or around one-quarter of all taxi drivers in Japan — on its platform.

Messaging app Line is another competitor in Japan, where peer-to-peer rides are banned. Line’s hailing service sits inside its app — which is Japan’s most popular messenger — and it has integrated with taxi operators that include Nihon Kotsu, but it is unclear how popular it is now following its 2015 launch.

Japan’s taxi industry is one of the largest at $15 billion per year. With Didi and SoftBank set to offer yet another competitor, it is no surprise that Uber CEO Dara Khosrowshahi has made Japan the first stop of his inaugural trip to Asia as head of the ride-sharing firm.

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