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Leading taxi-hailing app providers in Japan and South Korea to collaborate

Nna/kyodo

Leading taxi-hailing app providers in Japan and South Korea will collaborate in offering an integrated service to cater to the needs of the growing number of visitors to both countries.

Japan Taxi Co. and Kakao Mobility Corp. said they recently signed an agreement on capital partnership and are planning to develop a single smartphone app for calling taxis in the two nations as soon as this year.

Japan Taxi, the app provider covering the largest fleet of taxis at home, has sold Kakao Mobility new shares worth ¥1.5 billion ($13.5 million), equivalent to a 3.4 percent stake. It is the Tokyo-based firm’s first capital alliance with a foreign partner.

The Japanese taxi industry’s operating income stood at nearly ¥1.7 trillion in the year to March 2016, according to the Japan Federation of Hire-Taxi Associations, compared with an estimated ¥800 billion in South Korea, a Kakao Mobility spokeswoman said.

The South Korean company, which operates the Kakao T app to provide various mobility services, including the dispatch of drivers and parking, already has 240,000 taxi drivers as members, or 96 percent of the country’s total, and over 19 million users at home.

It aims to capture growing demand from South Korean visitors to Japan, the estimated number of which for the first seven months of this year grew 14.5 percent from a year earlier to over 4.6 million, according to the Japan National Tourism Organization.

Those heading from Japan to South Korea for the same period of this year rose 20.2 percent from a year earlier to top 1.5 million, the second-largest group of foreign visitors after Chinese, according to the government-backed Korea Tourism Organization.

Japan Taxi, an arm of Nihon Kotsu Co., a major taxi service provider, covers 70,000 taxis, about one-third of the total in Japan, and has seen a cumulative total of 5.5 million downloads of its app, according to the company.

The partnership with the South Korean counterpart is aimed at boosting the number of available taxis to 90,000 and achieving 16 million downloads by 2020, it said.

In January 2017, most taxi operators in Tokyo began offering a lower starting fare of ¥410 to attract foreign visitors and elderly people traveling short distances.

The transport ministry and the taxi industry hope the new fare table will help increase demand as the aging country gears up for the 2020 Tokyo Olympics.

“We will actively cooperate with Japan Taxi to forge innovation in the taxi-hailing culture in Japan with our technology and know-how,” the Kakao Mobility spokeswoman told NNA in a phone interview.