Prime Minister Abe to Ease Restrictions on Home-Sharing and Ride-Sharing Trends

Japan Real Estate

Taxis and Ride-Sharing

03 Mar, 2016 –

TOKYO— Teruko Neriki, an Airbnb Inc. host in Tokyo, gives her guests careful instructions on how to avoid trouble with the neighbors: Put out the garbage only on Tuesdays or Fridays, don’t invite anyone inside and don’t make a fuss. Ms. Neriki earns thousands of dollars a year via the home-sharing service, helping Japan alleviate an accommodation shortage caused by a surge in tourism. But there is a catch: In much of Japan, including Ms. Neriki’s quiet Tokyo neighborhood, home-sharing resides in a legal gray zone.

“So far, I haven’t had any major issues,” said Ms. Neriki, who manages the home on behalf of a great aunt. “The neighbors think my friends from overseas are visiting. But it still feels uncomfortable.” Long after the so-called sharing economy took off in the U.S., it is held back by a thicket of legal, regulatory and cultural restrictions in Japan. Some services that are widely used elsewhere, such as ride-sharing, are banned. And the idea of finding a home cleaner or nanny online remains alien in a society that places a premium on privacy, although a handful of startups with names such as AsMama Inc. and AnyTimes are trying to change that.

Now, in an effort to catch up in one of the hottest areas of the digital economy, the government of Prime Minister Shinzo Abe is moving to ease restrictions on home-sharing. In late January, Tokyo’s Ota ward became the first municipality in Japan to let residents rent out space to tourists in limited situations, after the ward won an exemption from the country’s hotel law. Hosts have to register with the local authority and agree to inspections, and visitors have to stay at least a week.

 

Lured by a weak yen, a record 19.7 million foreign visitors came to Japan last year, and that number is expected to grow in the run-up to the 2020 Olympics in Tokyo. Hotel space is getting tight. “We need to make the experience of foreign tourists visiting Japan more convenient and comfortable,” Mr. Abe said during a government panel meeting in October. “For this, we need to expand the number of short-term accommodations beyond hotels, and widen the usage of private cars as a means of transportation for tourists visiting rural areas.” It might take some time. While there are no laws specifically outlawing home-sharing, the hotel law says paid lodging services must maintain front desks and be located outside residential areas, conditions few private homes can meet.

The Ministry of Health, Labor and Welfare is working on a revision of the law to make it easier for homeowners to rent out space, an official said. The changes, which could take effect as early as April, are expected to include a reduction in the minimum floor space required for accommodations. With fewer than 27,000 homes listed on Airbnb, Japan trails well behind the U.S., with 337,000, as of January. Tokyo has about 11,500 listings, also as of January, compared with 66,000 for Paris, the top city world-wide, according to the company.

But Japan is showing some of the strongest growth. Listings rose more than fourfold over the past year, while the number of overseas visitors to Japan using the service rose more than sixfold, the highest rate in the world.

  

“Japan is a large market, both in terms of its GDP and its travel business, and its potential is evident from the growth we’re seeing,” said Yasuyuki Tanabe, chief executive of Airbnb Japan. Ride-sharing, the area pioneered by U.S. startups such as Uber Technologies Inc. and Lyft Inc., has yet to get far in Japan, even though some Japanese companies have invested in it. Tokyo-based e-commerce provider Rakuten Inc. owns a stake in Lyft. Local laws block Uber from offering its ride-sharing service with cars and drivers without taxi licenses. Uber introduced a taxi- and limousine-hailing service in Tokyo in 2014, but it faces stiff competition from traditional taxis. Uber spokesman Harold Li said the company needed more time. “We’ve had many in Japan reach out to us expressing a desire to bring ride-sharing to their cities,” he said.

Ichiro Kawanabe, chairman of taxi company Nihon Kotsu Co. and the Tokyo Hire-Taxi Association, said there was no need for Uber in Japan because taxis are abundant, convenient and competitively priced. “Uber may appeal to internationally minded, tech-savvy businessmen, but not to the typical granny who won’t know how to use the service,” he said.

Airbnb Japan’s chief executive, Yasuyuki Tanabe, in Tokyo last year. The home-sharing service is growing strongly in the country. 
Airbnb Japan’s chief executive, Yasuyuki Tanabe, in Tokyo last year. The home-sharing service is growing strongly in the country. Photo: yuya shino/Reuters

Mr. Li, the Uber spokesman, said taxis in Tokyo are occupied only about 30% of the time, and Uber’s goal is to “improve utilization of underutilized resources.” The Tokyo Hire-Taxi Association started an app in 2014 connecting users to 11,000 taxis, or roughly 25% of all taxis in Tokyo. Last year, Line Corp., which operates a popular smartphone messaging service, introduced its own taxi-hailing service in partnership with Nihon Kotsu.

Japan isn’t the only place where sharing has proved divisive. Ride-hailing services have sparked protests, bans or regulatory restrictions in many countries, while home-sharing prompted an unsuccessful referendum seeking tighter regulation in San Francisco. Opponents of further liberalization in Japan say home-sharing spreads noise and nuisances through Japan’s bedroom communities, whose serenity contrasts with the bustle of its commercial quarters. They say it also raises security risks, including terrorism.

The Japan Association of New Economy, a tech-company group, proposes setting up a contact point for neighborhood complaints, as well as a system for checking guests’ identification. Japanese society emphasizes privacy, which could pose challenges for sharing. But Jun Masuda, chief strategy and marketing officer at Line, says there are precedents. “In traditional Japanese village societies, it was common for people to help each other out,” he said. “So maybe there is a cultural background to the current social trend.”

(Source – “The Wall Street Journal“, Pic – Osaka, Japan / “m-louis“)

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