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Japan's regulations cause friction with emerging businesses
Charlie Morrison, 48, is a Canadian tourist who came to Japan at the beginning of August and is staying in a rental apartment in Chuo Ward, Tokyo
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harlie Morrison, 48, is a Canadian tourist who came to Japan at the beginning of August and is staying in a rental apartment in Chuo Ward, Tokyo.
Morrison found the one-room, 20-square-meter apartment for 5,000 yen (US$42) per night on the website Airbnb, which enables visitors to rent empty rooms in private homes and other spaces. There is a kitchen, unit bathroom and refrigerator, and, Morrison remarks with satisfaction, it is 'cheap and comfortable.'
Airbnb is a private online lodging service that is used by over 1 million people worldwide on the busiest days. Usage is on the rise in Japan as well, and in August the number of registered properties reached 13,000.
Hotels are seeing shortages of space due to the rapid increase in international tourists.
'Our service makes it possible to welcome many tourists, and leads to regional vitalization,' said Airbnb Inc.'s Country Manager in Japan Yasuyuki Tanabe, 43.
But there are problems. Unlike hosting a friend for free in a private home, hosting a stranger in exchange for money can be viewed as a kind of hotel business. The Inns and Hotels Law requires that a hotel be equipped with minimum facilities such as a front desk and be approved by a public health center.
Airbnb is only a broker, but there are fears that renters of empty rooms could be charged with violating the Inns and Hotels Law. A person who used similar service to rent out a room to a traveler was arrested last year on suspicion of violating the law.
As part of its policy of easing regulations, the government now recognizes the use of empty rooms as lodging facilities if they are in the jurisdiction of a local government that lies within a government-designated national strategic special zone and the local government stipulates an ordinance on its own. However, there are still no examples.
'The government offices move slowly, and we could not do anything for a year,' said Yasuhiro Kamiyama, 53, president of the IT firm Hyakusen Renma, which was trying to start a lodging business in a special zone. 'We made fools of ourselves by adhering to the law and expecting regulations to be eased.'
The deregulation action plan approved by the Cabinet at the end of June included recognizing private lodgings at times when a municipality requests such recognition during large-scale events such as festivals. The government aims to come to a conclusion in 2016 about whether to allow private lodgings at all times, not just during special events.
It now seems possible that this sort of service will be recognized with certain conditions, such as a limit on the number of nights stayed, but the existing hospitality industry is demanding regulations to ensure safety, making the outcome of all this unclear.
Even as many Japanese firms are impatiently awaiting the easing of regulations, this private lodging service continues to grow within a legal gray zone.
It's 'unfair'
There are other points of friction between existing industries and the new sharing economy.
The American service Uber allows users to call hired cars by inputting their current position and destination on a smartphone. The service officially launched in Japan in March 2014, and has been steadily gaining traction.
The service differs from taxis in that it changes its fares based on supply and demand. Fares are expensive when demand is high and cheap when there are many empty cars. The president of the company's Japan office, Masami Takahashi, 34, emphasizes that the service 'improves the efficiency of dispatching, while keeping prices low and drivers' pay high.'
Taxis are regulated under the Road Transportation Law, and fares cannot be set freely. However, Uber is considered to be an agency that dispatches hired cars, so it does not fall under these regulations. The service offered is the same as a taxi or regular hired car, but its classification allows it to set its fares freely.
'The truth is it is the same service, so it's crazy to apply different regulations,' said Tokyo Hire-Taxi Association Chairman Ichiro Kawanabe, 44. 'Uber is unfair.'
The sharing economy keeps growing. To protect users, 'new legislation is essential,' says Chuo University Prof. Junji Annen, a member of the government's Regulatory Reform Council. However, excessive regulation could eliminate the 'cheap and convenient' advantages of the new services. It is imperative to act while keeping the future in mind. (++++)
