Chinese ride-hailing giant Didi Chuxing will scale back its core business reach in Japan as coronavirus-induced travel restrictions reduce demand for taxis in the country.
According to a statement released on its Japanese website, the SoftBank-backed company will entirely halt its taxi-hailing service in 11 prefectures including Aomori, Akita and Niigata from July 1 in Japan, a market it tapped into in September 2018.
The service will also be partly suspended in Hokkaido and the prefectures of Hyogo, Hiroshima and Okinawa, the statement said.
The move could be seen as a reversal on Didi’s ambitious plans for the Japan market, where the company is diversifying its business as part of efforts to turn a profit. In April, Didi launched a food delivery service in Osaka with the intention of expanding the service to other parts of the country.
When contacted by Caixin, a Didi representative attributed the business suspension to fallout from the Covid-19 outbreak, saying that the company’s long-term commitment to the Japanese market remains unchanged.
Meanwhile in Japan, Didi plans to charge an app usage fee from July 13, a move seen as a makeshift one to maintain revenue in the face of the public health crisis, according to a report published on Nikkei’s Chinese website. In response, the Didi representative said that the company will use the proceeds to improve its services and provide more tailored products for drivers and riders.
The Didi representative refused Caixin’s request for the trip volume Didi logged in Japan during the coronavirus-affected first quarter and the same period of 2019, a key indicator reflecting the company’s basic income level.
Last month, Didi president Liu Qing revealed during an interview that the company’s core ride-hailing business had been profitable.
Contact reporter Ding Yi (email@example.com)