FEATURE: Japan's 'sharing economy' all the rage in 2016


Japan's "sharing economy" all but caught fire in 2016, inspired by a growing global trend.

Overseas giants such as U.S. Airbnb Inc. and Uber technologies Inc. have rapidly spread and some major cities such as Seoul and Amsterdam promote themselves as sharing cities.

Now in Japan, the private and public sectors have firmly joined hands, with a wide variety of new services on the brink of growth.

In Tokyo's suburban city of Machida, Ruri Aoki, a 46-year-old farmer, shares her experience of harvesting vegetables with no agrochemicals and enjoying a meal with guests on a hill surrounded by fields, bamboo and cedar forests.

Aoki started hosting guests in June through sharing economy service platform, TABICA, which introduces people to the daily lives and customs of locals through guides and workshops. Her Ooruri Farm accepted 30-40 guests each in October and November, largely "through word of mouth." Money, she says, is not her main objective.

"I always look forward to seeing my guests leaving happily," Aoki told Kyodo News in a recent interview about her mid-December event. "Guest could have enjoyed a much nicer meal at a restaurant. More people understand the sense of value for what money can't buy."

The father of an elementary school boy was glad his son took part in the activity, which featured digging a 1-meter hole to harvest edible burdock root. They were among three families who participated in the farming.

"This is the very first time to do real farming," the boy's mother said.

TABICA is operated by Gaiax Co., a listed information technology firm that has seen a steady growth in revenue from corporate services over the past five years, according to its financial statement.

In 2015, Gaiax took over entities that operate long-distance ride-sharing "notteco" and "tadaku," for which foreigners living in Japan teach home cooking recipes from their respective countries.

The IT firm also has actively acquired a stake in more than 30 sharing economy start-ups, although they have not yet paid off, said Gaiax president Yuji Ueda.

TABICA, launched in June 2015, has started attracting more hosts and guests this year. The number of monthly guests jumped more than 20-fold to over 2,000 in the seven months to October, according to the firm.

Like the farmers in Machida, several hosts earn hundreds of thousands of yen per month through TABICA. Airbnb began a similar global service Trips including Japan in mid-November.

Through tadaku, a Taiwanese housewife earns about 100,000 yen ($850) monthly by sharing Taiwan's home cooking recipes and enjoys meals with guests, some of whom become repeat users and also bring new guests to the service platform, a Gaiax official said.

In Japan, psychological barriers had hampered the spread of concepts and sharing economy services.

According to a 2015 government survey, the vast majority of people, regardless of age groups, declined to use such services as home- and ride-sharing. Around 60 percent of respondents were reluctant, citing possible accidents or trouble.

The survey also showed people are still unfamiliar with sharing economy services, resulting in fewer users and illustrating sharp contrasts with the trends in the United States, Britain, Germany, China and India.

But the landscape has changed. The number of industry players has topped about 300 and is growing, with membership firms and organizations for the Sharing Economy Association, Japan, an industry body established in January, surpassing 130, industry officials familiar with situation said.

Four major insurance companies have joined for support, providing coverage for three stakeholders -- service providers, hosts and guests -- to alleviate concerns of risks.

Early this year, the Cabinet Office considered drafting a new law for regulating sharing economy services in the wake of trouble surrounding new foreign services, a source familiar with the matter who wished to remain anonymous said.

The industry reacted promptly to halt the move, organizing study groups with lawmakers and bureaucrats to help examine the sharing economy. After a series of communications, "They noticed that the sharing economy can change socioeconomic structures and solve many social problems we are facing now," the source said.

"Europe's move also awoken policymakers to the global trend in the sharing economy and its significance."

The European Commission set guidance in June for a collaborative economy, the term more commonly used in Europe. "These new business models can make an important contribution to jobs and growth...if encouraged and developed in a responsible manner," it said in a statement.

In Japan, the Sharing Economy Review Meeting, a panel convened by the industry and government officials, lawyers and IT and consumer issue experts, compiled the de facto industry guideline through discussions between July and November.

In view of facilitating the industry, the guideline urged service providers to set voluntary rules for ensuring safety for users and credibility for services while checking legitimacy with the help of lawyers. The guideline clearly states that a "paradigm shift looks set to begin in industry and society in the country."

On Nov. 25 in Tokyo, the first business forum dubbed "Sharing Economy Summit" was held on the back of greater support by the government and municipalities.

Five municipalities across the country have declared themselves to be sharing cities. Four among the five also partner with TABICA to attract more tourists to local towns.

The city government of Hamamatsu, Shizuoka Prefecture in central Japan, has dispatched an official to space-sharing service provider Space Market Inc., to learn how the city can efficiently use idle public facilities scattered across Japan's second biggest city by land size.

Kyotango city on the Sea of Japan side of Kyoto introduced Uber's ride-hailing app service to substitute for declining public transportation and taxi services amid increased depopulation. Another town in Hokkaido is conducting a trial.

Takuya Hirai, a lawmaker from the ruling Liberal Democratic Party's lower house chairing the party's IT special strategic committee, said at the summit, "We would like to first support those who are committed to trying (the sharing economy)" rather than regulating new services not assumed by existing laws.

Kidsline, a Japanese child-rearing service that matches mothers with caregivers, has seen many repeat users after mothers overcome the psychological resistance of a service not commonly used in the country, according to President Kahoko Tsunezawa. "For our service we are entrusted with a baby's life, so the first step for users is critical," she said.

Arun Sundararajan, a professor researching the sharing economy at New York University's Stern School of Business, said in his keynote speech at the summit, "Japan has a huge advantage in growing in sharing economy because it seems that there is a fundamentally high level of trust in society within groups."


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