KDDI and newmo to develop autonomous taxis in Osaka

Japanese operator KDDI will invest capital and other resources in a partnership with autonomous driving start-up newmo to develop self-driving taxis in Osaka Prefecture, with Sakai City named as the initial deployment target.

The alliance, which also includes KDDI's Smart Mobility unit, brings together two complementary technology stacks. KDDI contributes communications, AI, computing infrastructure, remote monitoring and high-precision positioning technologies. newmo supplies the autonomous driving technology itself.

An AI-based on-demand system already developed by KDDI Smart Mobility will form the foundation of a wider autonomous transport platform. KDDI believes this system could be adapted to various regions to tackle localized transport challenges.

Why is KDDI targeting regional transport?

The operator's stated rationale is a driver shortage affecting regional transport systems across Japan. KDDI argues that autonomous systems could help address the shortfall, positioning mobile technology as a solution to a concrete social and economic problem rather than a pure network play.

The commercial logic extends beyond taxis. The companies are exploring ways to pair the self-driving taxi technology with KDDI's communications, finance and retail services divisions over the longer term, which would fold the venture into the operator's broader convergence strategy.

What did the executives say?

newmo president and CEO Naoki Aoyagi disclosed that the start-up already operates 1,900 self-driving taxis across Japan and expressed hope that the KDDI tie-up will accelerate implementation.

"By becoming a partner in terms of capital as well, we have established a system that allows us to work together from a long-term perspective," Aoyagi said.

Kei Matsuda, CEO of KDDI Smart Mobility, said the unit is already working with "local governments and transportation operators" to address challenges in the sector. He expects that existing work to support the three-way venture.

Technology alone is not enough

KDDI added a note of caution that separates commercial reality from vendor optimism. The technology by itself, the operator stated, is not sufficient to introduce an effective self-driving taxi service.

Operational infrastructure covering "passenger transportation businesses and the vehicle" is also needed, KDDI explained. That framing signals the partners view regulatory-compliant operations, fleet management and service design as equal partners to the driving technology itself.

The venture adds to a growing list of examples in which KDDI applies mobile technology to real-world challenges outside its core consumer business. Autonomous transport, backed by the operator's connectivity and computing assets, is emerging as one of the more concrete strands of that strategy.

With 1,900 vehicles already running under newmo and a capital partnership in place to align incentives, the partners have set a foundation in Sakai City that could extend to other regions if the Osaka deployment proves out.