Business

Coronavirus changing landscape of Japan's sharing economy

Kyodo

The novel coronavirus pandemic is dramatically transforming the landscape of the sharing economy in Japan as people look to reduce their risk of infection by steering clear of services that bring them into close contact with others.

But if businesses providing cowork spaces or private lodgings have seen a sharp decline in demand, other businesses such as delivery services are thriving. Experts say the trend is likely to continue until a vaccine or treatment becomes available.

Chen Lirong, 32, who rents out eight rooms near Tokyo’s Asakusa tourist area through Airbnb, which lists private properties where guests can stay, said the occupancy rate has recently hovered at under 10 percent, down from nearly 100 percent before the pandemic.

“I have been doing this because I like to interact with people from around the world, but it may be difficult for a while,” she said.

Taking out a loan to purchase relatively new apartments, she started her rental business in 2016, eventually becoming an Airbnb “superhost” with a track record of good reviews. But since the coronavirus outbreak her family is now barely breaking even, even with the income that her husband earns from his office job, she said.

A U.S. research firm said the average cost of a night’s stay at a private lodging in Tokyo in April was down by two-thirds from the end of last year. Citing declining revenues, Airbnb Inc. has decided to postpone going public this year and said it will cut 25 percent of its workforce.

Office sharing has also struggled amid the pandemic. WeWork Companies Inc., a U.S. firm that provides shared workspaces, has confirmed coronavirus infections at four of its sites in Tokyo.

“There is almost no one here,” said a user of WeWork’s shared workspace in the capital’s Shibuya shopping district. “I will terminate my contract at the end of May.”

“Unless there is a drug or a vaccine (for the novel coronavirus), people will continue to avoid share services that involve personal contact,” said Naoko Kuga, a senior researcher at NLI Research Institute.

In contrast, there is a growth in sharing-economy jobs with no or minimal face-to-face contact, such as side jobs that utilize individuals’ time and skills.

One company that has benefited is Crowdworks Inc., which introduces one-off jobs and reports there has been a surge in the number of people registering with the service.

“There is a demand among people whose overtime money has been cut and who want to put in some more work while they are teleworking,” a company official said.

Uber Technologies Inc.’s rideshare business has been hit by the pandemic, but its food delivery service Uber Eats is picking up in Japan. Many eateries are seeking to register, only to be told that the process could take several months in some cases.

Under a new service it has started since the coronavirus outbreak, people who order food do not have to meet face to face with the delivery person as the food is placed outside the front door.

Even as the coronavirus changes people’s lifestyles, some experts were optimistic about the future of the sharing economy in the long run.

“(The outlook) is grim in the short term, but in the long term, people will return to the sharing-type economy, because they can diversify risks,” said Anju Ishiyama, secretary general of the Sharing Economy Association in Tokyo.

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