Japan is ready to share

The Japanese sharing economy service market in fiscal year 2017 has grown to over 130% of the size of the previous fiscal year according to a survey conducted by the Yano Research Institute in mid-2018. Sales of domestic sharing economy providers, such as space or car sharing services, were forecast to grow from approximately 72 billion Japanese yen in fiscal 2017 to almost 139 billion yen by fiscal year 2022.

Despite the positive outlook, Japan continues to display a hesitant approach to the sharing economy phenomenon, in which people rent goods, spaces or services on a peer-to-peer scheme through online platforms, such as Airbnb, Uber or Mercari.

While ride-sharing, such as Uber, is prohibited by law in Japan, the home-sharing market was recently also affected by legal regulations for private lodgings. The new laws, which came into force in June 2018, resulted in the elimination of the majority of Airbnb listings in the country. Such legal restrictions are likely to temporarily cause negative effects on the Japanese sharing economy market. However, with the number of foreign tourists demanding vacation rental services rising and ride-hailing partnerships sparking between sharing service providers and local taxi companies, the domestic sharing economy is likely to expand eventually, stimulating new market entries, and therefore leading to an influx of funds in the country’s general sharing economy services.