Regional Taxi Startup Drives Digital Shift, Draws Investor Interest

[Japan: Successful Case of Regional Investment] ④
DennoKotsu, a Mobility DX Platform Originating in Tokushima

[이데일리 마켓in 박소영 기자] TOKUSHIMA, Japan — A young man who once set out for the United States with dreams of becoming a professional baseball player returned to his hometown—and became a taxi driver at his grandfather’s company.

That experience led him to identify inefficiencies in Japan’s largely analogue taxi industry and ultimately launch a startup aimed at modernising it.

Yosuke Kondo, CEO of DennoKotsu. (Photo = DennoKotsu)

Yosuke Kondo, founder and chief executive of DennoKotsu, now leads a company that is driving digital transformation (DX) in Japan’s taxi sector. Founded in 2015 in Tokushima Prefecture, DennoKotsu is widely seen as a successful example of a startup taking root outside major urban centres.

“Japan faces severe challenges from population decline and ageing,” Kondo said. “In regions where these issues are most acute, the impact of digitalisation can be even greater. That’s what led me to start the business.”

DennoKotsu helps taxi operators digitise their operations through a suite of services, including cloud-based dispatch systems, shared dispatch infrastructure and regional mobility solutions.

Its flagship product, a cloud-based dispatch system known as “DS,” has been adopted by taxi companies across all 47 prefectures in Japan.

The company also offers “DS Kone,” an integration platform that consolidates ride requests from multiple channels—including phone calls and various ride-hailing apps—into a single interface. Drivers receive dispatch instructions via in-vehicle tablets, improving both operational efficiency and profitability.

To address labour shortages in rural areas, DennoKotsu provides 'Taxi CC', a service that outsources dispatch operations. Last year, it also launched 'Cabriolet', a cloud-based platform designed to help taxi companies manage operations end-to-end.

DennoKotsu’s office located in Tokushima Prefecture. (Photo = Reporter Soyoung Park)

The company’s growth has drawn increasing attention from strategic investors. In its Series D round last year, DennoKotsu raised 2.5bn yen from backers including Mitsubishi Corporation and Uber Technologies. According to the company, it marked Uber’s first investment in a Japanese firm. Total funding has now reached 5.2bn yen.

DennoKotsu is also building ties with South Korea. “In sectors like transportation and infrastructure, establishing a global value chain is essential,” Kondo said. “We aim to collaborate not only with Korean companies but with global partners to expand beyond Japan.”

He added that the company has studied Korea’s mobility sector, visiting local firms to learn from ICT-based dispatch models.

More recently, DennoKotsu conducted a proof-of-concept for autonomous taxi services in Naruto City, Tokushima, in partnership with NEC. The trial used a Hyundai Ioniq 5 equipped with autonomous driving technology from Korean startup Autonomous A2Z.

The test, conducted under Level 2 autonomy with a safety driver onboard, evaluated service stability and technological reliability on public roads in western Naruto.

Kondo emphasised that regional startups must grow alongside their local ecosystems. “Expanding touchpoints with local communities is critical,” he said, citing initiatives such as delivering startup-related lectures at local universities to build a foundation for long-term growth.

박소영 (sozero@edaily.co.kr)