The big tech giant released a press statement that it has decided to venture into the taxi business market in Japan this spring. The taxi market in Japan is worth $16 Billion with Uber taking just 1% of the total market.

It has created an AI application that will help it be able to match drivers to riders. The app will be able to also predict customer demand using factors like weather, traffic and local events. The AI app will help in making sure users and the taxi drivers will be matched and there will not be anyone let waiting for long periods. But they have not specified if they will expand the business outside Japan.

Japan has a regulation that only allows riders to be matched with licensed operators instead of the non professional drivers. Due to this Sony has partnered with Daiwa-Motor Transportation, International Motor, Hinomaru Kotsu, Green Cab, Kokusai Motorcars, and Checker cab group.

The combined cars from all the companies will be a fleet of 10,000 cars in total and they will service just the greater Tokyo area. The platform will also allow other taxi drivers to join in the app. With Japan’s smart phone market being very productive the app is going to provide Sony an opportunity for growth within the sector.

After this announcement, Uber C.E.O Dara Khosrowshahi, made the announcement that Uber will begin to make more partnerships with Taxi companies as this is would become a very strong product. This comes after Uber decided to let go of some of its international market share and is deliberating on whether to sell out its Southeast Asia market to its competitor in Singapore named Grab.

He went on to say that its previous approach to Japan’s market was clearly not working for the company and is now trying to make inroads into the Tokyo market. Due to the regulation, Uber cannot offer its services to major Japanese cities but operates in small towns and rural areas where there are no licensed taxis. The CEO is in Tokyo to meet with regulators.

But Sony is not the only one who is interested in the taxi business in Japan. The competition for Japan’s market share seems to be reducing every day. Toyota had also made the announcement that it will invest in a 70 billion yen ($ 70 million) into JapanTaxi, an AI taxi hailing app, this February.

It had also invested in Uber. It also says it has a fleet of 60,000 taxis registered in its name. This is a quarter of all the taxis registered in Japan thus claiming to have the largest market share in taxi dispatch apps.

Another market player is a messaging app called Line that has set its sights on the taxi market. It has partnered with Nihon Kotsu, one of the largest taxi companies in Japan, having over 3,000 taxis in Tokyo alone and another 23,000 all around the country. British taxi app Hailo is also available in Osaka and Tokyo.

The Japanese-Softbank Group and the Chinese taxi ride hailing firm Didi Chuxing announced earlier this month that they are planning to venture into the market and have already partnered with the cab service Daiichi Koutsu Sangyo.
If they do not roll out soon, Sony might end up missing on a big chunk of the market.