Going the Extra Mile

Japan’s leading taxi company Daiichi Koutsu is diversifying, but customer service
remains at the core of all its businesses.

In Japan, every aspect of the taxi business—from where companies operate to how much they can charge—is strictly regulated. How can any one firm hope to stand out from the competition within such a rigid framework?

Not difficult, says Ryoichiro Tanaka, president and CEO of Kyushu-based Daiichi Koutsu Sangyo Ltd. The secret is to make yourself an indispensable part of your customers’ lives. “We want to be a valuable part of the communities we serve,” he says. “That’s why we are always asking ourselves what we can do to help.”

Translate that philosophy into action and the result is unique offerings like “Mama Support,” a special service whereby pregnant mothers can get themselves driven to hospital for prenatal checkups by taxi drivers trained in midwifery Should labor pains come on mid-journey, Daiichi Koutsu’s control center is even authorized to contact the husband so he can rush around to the hospital in time for the birth.

“Around 8,000 women have registered for Mama Support,” comments Takada, noting that the company, while not allowed by law to charge more for this special service, reaps the reward in the form of enhanced customer loyalty.

It’s a similar story in regions where hard-up local authorities have cut back on bus services. Daiichi Koutsu has stepped in to offer a shared taxi service, using people carriers with room for seven. “We do this in 120 localities in Japan,” explains Tanaka. “We’re happy to break even. It’s a sort of advertising that helps build demand.”


One of Daiichi Koutsu’s drivers


A Daiichi Koutsu taxi

Unique services

This high level of personalized service starts from the first time a new customer takes a Daiichi Koutsu cab. “We send a representative over the very next day to thank them for choosing us and to find out if they were happy with our service,” Tanaka says.

The approach delivers a double benefit: the customer learns to associate the company with a human face, while Daiichi Koutsu secures valuable direct feedback. “We also have 300 monitors who ride our cabs to report on service quality,” explains Tanaka.

This obsession with taking care of the customer is called omotenashi, or “hospitality”—in Japanese. Other examples of omotenashi in action include: taxi drivers who specialize in helping elderly people with their grocery shopping; drivers trained to provide commentaries in popular tourist destinations like Okinawa; and, on a more solemn note, drivers who can talk passengers through the impact of the earthquake and tsunami in the disaster-battered northeast of the country.

In 2013 the number of foreign tourists visiting Japan soared 24% to almost 10.4 million. To make sure that non-Japanese-speaking passengers can communicate their wishes to the driver, Daiichi Koutsu has devised a free mobile-phone-based interpreting service in English, Chinese and Korean. And as technology advances, the company has also produced a smartphone app that enables customers to call taxis directly to their location.

All this innovation has paid off. Starting off with just five taxis in 1960, Daiichi Kotsu now operates some 7,800 taxis and 800 buses in 33 localities throughout Japan.


Daiichi Koutsu’s repair and maintenance shop in Yangon


Burmese mechanics being trained in Kitakyushu

Property and tourism

Overall, transport accounts for around 60% of annual sales, but property development is another business mainstay. “We acquired around 150 taxi companies in the course of building up the business,” Tanaka explains. “Many of these had large parking lots in desirable locations near main roads. When we consolidated operations, this land was freed up for development.”

Currently, Daiichi Koutsu builds around three to four hundred condominium units per year, as well as detached homes, making it one of Kyushu’s top two developers.

Ultra-high-end tourism is another burgeoning niche. With Kitakyushu, site of Daiichi Koutsu’s head office, closer to cities like Shanghai than to Tokyo, Mainland China presents another promising “local” market. Daiichi Koutsu currently flies high-net-worth Shanghainese to Kyushu for sophisticated cancer treatments at local university hospitals. It also brings Chinese golf enthusiasts from Dalian—snowbound in the winter—to play at Fukuoka’s best clubs which are open all year round.

Relentless service innovation means robust financial results. In fiscal 2013, Daiichi Koutsu generated ¥6 billion of profits on ¥87 billion of sales. “We are targeting ¥100 billion by 2019,” announces Tanaka. “We are not just a transport company, but a business for life in all its aspects.”



The company develops and manages residential (above) and commercial buildings (below).

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