Sharing economy meets legal, regulatory and cultural restrictions in Japan

For February’s post, we have chosen a very interesting article that deals with the subject of sharing economy, titled “Japan Slowly Opens Door to Sharing Economy” retrieved from The Wall Street Journal.

This article highlights two components of the sharing economy namely home-sharing and ride-sharing within the context of the Japanese culture.

Home-sharing in Japan

source: Free Digital Photos

The authors, Alexander Martin and Eric Pfanner, report the story of Teruko Neriki one of the few people opening its house to Airbnb guests. She says see gives strict instructions to its guests in order for them to avoid trouble with the neighbors.

As stated in the article, “the idea of finding a home cleaner or nanny online remains alien in a society that places a premium on privacy”. In addition, Japanese that are not in favor of home-sharing explain their point of view by saying that it disturbs serenity in residential areas and threatens their security.

But Japan hotels capacity is tightening. According to a recent article from The Japan Times, Japan average room occupancy ratio in 2015 amounted to 78%, 83% in Tokyo and 87% in Osaka. To compare, Paris average room occupancy ratio in 2015 amounted to 63.7% (source: parisinfo.com). According to The Japan Times, “The number of visitors to Japan in 2015 is estimated to have topped 19 million, an increase of nearly 50 percent from 2014.”

This shortage of accommodation may translate into a loss of income for the Japanese economy if they do not increase their offer. Therefore, the Japanese government has decided to ease restrictions on home-sharing.

Ride-sharing in Japan

As for ride sharing, it is banned in Japan as it is not possible to offer driving services without a taxi license. The authors cite the words of the chairman of taxi company Nihon Kotsu Co. and the Tokyo Hire-Taxi Association that say that “there is no need for Uber in Japan because taxis are abundant, convenient and competitively priced.”

source: Free Digital Photos

We would like to discuss two issues that have been raised in this article: cultural differences when exporting a successful concept and shortage of hotel accommodation in big cities.

Cultural differences when exporting a successful concept abroad

The difficult implementation of Uber and Airbnb in Japan can be linked to several successful American Businesses that have failed overseas because of a lack of cultural adaptation. For example Starbucks performed poorly in Australia because people prefer to drink their coffee in local stores. And Walmart did not succeed in South Korea because it has failed to identify Koreans preference for small packages.

It appears to us that businesses looking to exploit the huge potential of new markets may need to adapt their concept in order to remain successful. Cultural difference is a very important dimension to take into account.

Shortage of hotel accommodation in big cities

Japan is not the only country suffering from hotel-accommodation shortage. In 2014, a report anticipating inbound tourism growth in Ireland advised to increase accommodation capacity by up to two thirds (source: Irish Examiner).

On the other hand, it is interesting to see that a city like Brisbane which was formerly facing shortage of hotel accommodation, now has to cope with supply excess (source: The Courier Mail).

Additionally, we think that this issue can be linked to hotel construction in cities hosting mega events such as Olympic Games and FIFA World Cups. For example, 46 large top hotels have been built in Brazil to cope with the upcoming flow of tourists (source: Top Hotel Projects). We can wonder if these hotels construction will still be relevant once the FIFA World Cup is over.

Lise Cimbolini 
& Trung Duc Nguyen