CHINA’S Didi Chuxing and Japan’s SoftBank Group Corp. will roll out a venture in Japan later this year to provide ride-hailing services, amid a global battle to control the technology increasingly central to urban transport.

The move into Japan underscores a recent push by Didi to beef up its presence in markets outside China, although it will face challenges to expand its services in the country where existing taxi companies are lobbying hard against deregulation.

In Japan, ride-hailing companies face strict rules that effectively bar nonprofessional drivers from offering taxi services on safety grounds, and are limited to services that match users to existing taxi fleets via mobile platforms.

The two firms said in a statement they aim to trial matching services in Japan this year. SoftBank is an investor in Didi, which raised US$4 billion to fund its global push in December at a valuation of more than US$50 billion.

Tech-based disruptors like Didi and Uber Technologies Inc., as well as traditional carmakers, are all looking to get ahead in the ride-hailing market amid a global shift in the auto industry towards car sharing, autonomous driving and electric vehicles.

Didi has rapidly expanded overseas in the past year since sealing its dominance in China with the purchase of Uber’s local unit in 2016, ending a cash-burning subsidy war that cost the U.S. firm roughly US$2 billion.

The Chinese firm is, however, facing rising challenges at home, including a slower pace of growth and new rivals entering the market. Drivers also complain that reduced subsidies mean they are working longer hours for less pay.

In January, Didi agreed to acquire control of Brazil’s 99, in a deal sources said valued 99 at over US$1 billion and gave Didi a significant majority stake in the Brazilian firm.

The Chinese company is also looking to break into Mexico.

“I can see that in a year from now, if you’re a Chinese outbound traveler, that everywhere you go you’ll have the option of using Didi to find a ride, and that helps them secure their existing customer base,” said Kirk Boodry, analyst at New Street Research.

SoftBank holds stakes in Didi, Indian rival Ola and Southeast Asia’s Grab. Last month, the Japanese firm became the largest shareholder in Uber.

Didi and SoftBank’s trial service, which will leverage Didi’s deep learning-based demand prediction and smart dispatch systems, will initially roll out in cities including Osaka, Kyoto, Fukuoka and Tokyo.

(SD-Agencies)