UPDATED 19:57 EDT / FEBRUARY 19 2018

APPS

Sony reported to be entering Japan’s ride-hailing market

Japan’s Sony Corp. is said to be entering the ride-hailing game in its home nation, with reports suggesting that it’s teaming up with a number of local taxi firms on a new system that uses artificial intelligence to predict demand.

The initiative pits Sony up against some fierce competition: both Uber Technologies Inc. investor SoftBank Group and Toyota Motor Corp., both of which are building their own rival systems, Nikkei reported.

Sony is partnering with five local taxi providers in Tokyo, including Daiwa Motor Transportation, Hinomaru Kotsu, Kokusai Motorcars, Green Cab and the Checker Cab group, Nikkei said. The plan is to create a joint venture that will be tasked with building the new AI taxi-hailing system, which will analyze factors such as weather, traffic conditions and user’s history to dispatch taxis more efficiently. The joint venture will also create a new digital payment service, the report said.

Japan somewhat surprisingly trails other developed nations when it comes to ride-hailing services. Companies such as Uber are largely prevented from operating in the country due to Japan’s “in-principle ban” on the use of privately owned vehicles for such services, Nikkei said. As a result, Uber is focused on creating its own dispatch system for taxi operators. China’s Didi Chuxing Technology Co., another ride-hailing firm backed by SoftBank, is also said to be working on its own dispatch system in partnership with Japanese taxi operators.

Other rivals in the market include Toyota, which is partnering with mobile application developer JapanTaxi and taxi firm Nihon Kotsu on its own AI-based dispatch system.

“This is a logical consequence for Sony as enterprises are becoming software companies and AI is the key driver that helps to change and redefine best practices,” said Holger Mueller, principal analyst and vice president at Constellation Research Inc. He explained that the move would also help Sony to sell entertainment systems, one of the company’s core competencies, for self-driving cars in the future.

“Sony is as far removed from the self-driving business as Google is,” Mueller continued. “The only question is, what took Sony so long?”

Nikkei said that the stakes are high because Japan’s taxi companies may eventually all congregate on a single platform that bags the most users. That would mean more data flows into the hands of a single service, making it even more efficient.

Image: Babi_Santander/Flickr

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