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Politics

Japan begins licensing the sharing economy

Public-private effort seeks to expand and regulate emerging sector

A condominium room available for rent in Tokyo's Ota Ward.

TOKYO -- A licensing regime governing Japan's sharing economy is going into effect this month as the public and private sectors band together to foster a nascent industry.

The sharing economy runs the gamut from ride-hailing to private home rentals -- the latter known in Japan as minpaku. These businesses are expected to become a growth sector, especially considering the demand from foreign tourists streaming into Japan.

Means of protecting both operators and consumers have been a long-standing issue for this business category. First, the Sharing Economy Association, Japan, a group formed by six companies, will accept applications for licenses starting this month. This arrangement is based on guidelines from the government and will cover private room rentals, ride-hailing and even lending of expensive handbags, among other enterprises.

Applicants must fulfill conditions, like creating a help desk for customers, and the certifications are good for three years barring an infraction. The goal is to authorize about 70 companies by fiscal year 2019.

At the same time, Sompo Japan Nipponkoa Insurance will sell new policies dedicated to these businesses. Newly licensed operators will qualify for discounts on premiums up to about 60% when they sign up for the insurance.

Tokio Marine & Nichido Fire Insurance and Mitsui Sumitomo Insurance are expanding their coverage to the actual service providers and users, as well as licensed online intermediaries. This way, parties will be protected if customers damage property or get injured.

But this new framework is not expected to immediately open up the domestic market for ride-hailing giant Uber Technologies and the like. Although the sharing economy has taken hold in the U.S. and China, its entry into Japan has faced significant pushback from the taxi and hospitality lobbies.

(Nikkei)

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