As Japan takes to rental e-scooters, some see changes to cities ahead

Picture the scene: You’re running late for work for the second time in a week. It’s a cold winter’s day, your long coat bogging you down as you jog to catch the train. You look at your watch and with desperation realize that you’re never going to make it to the station in time.

Just as you’re about to admit defeat and call your boss, you turn a corner and there — as if appearing out of thin air — stands a row of electric miniscooters. Accessing the service’s app on your smartphone, you take off for the station, making it there a cool five minutes before the train departs.

Many of us have been there — the daily city commute where the distance between home and the station is just a bit too far to be comfortable, and the rushed morning schlep to the office takes on that extra dimension of unwelcome stress.

Now, however, as Japan’s commuters begin the slow return to the office amid the COVID-19 pandemic, electric “shared mobility” services are popping up across the country as a low-cost means of getting around.

While such services have taken off over the past decade from Paris to San Francisco, the concept — having previously failed to gain traction in Japan — is now set to change the way the nation's residents interact with the city around them in a potentially distinctive way.

And the clear winner of the ongoing boom in these services? Luup.

The Tokyo-based startup now enjoys more than a 90% market share for e-scooter rentals, boasting a fleet of approximately 5,000 e-scooters and e-bikes across roughly 2,340 pickup points in cities throughout the country — including tourist hotspots Tokyo, Kyoto and Osaka.

“It’s a really great way to experience the charm of Japan,” said Luup CEO Daiki Okai during an interview. “We have ports by Kinkakuji Temple in Kyoto, and in popular sightseeing areas in Tokyo like Asakusa and Skytree tower, plus in the vicinity of local hotels, which improves freedom of movement for tourists.”

While currently classified as a form of motorcycle, and so in principle requiring the use of a helmet and a driver’s license, new e-scooter regulations introduced earlier this year mean that by April 2024, a license will no longer be required — helmets, meanwhile, are currently advised but at the discretion of the user. That will allow riders over the age of 16 — as well as tourists — to ride on the road at speeds of up to 20 kilometers per hour, and on the sidewalk at less than 6 kph.

“Now that the rules have been simplified, with an emphasis on pursuing safety and convenience, I believe that use of these new systems is really going to take off,” Okai said.

The company rents the land for its ports — squared-off plots used to store the scooters and bikes, plus a panel with a QR code for accessing the company’s app — in areas likely to draw foot traffic, closing the gap between not only hotels and sightseeing spots, but also between residential areas and local amenities, or offices and the nearest train station.

Key to the company’s growth so far — which has included a land lease agreement for ports at FamilyMart convenience stores and raising over ¥4.6 billion ($34.7 million) in financing via public and private investment — is the idea of “stationification.”

In Japan, the area immediately surrounding the local train station typically houses the district’s amenities — its shopping malls, movie theaters, clinics and supermarkets. The price of both land and rent increases significantly the closer a home is to the station, with walking distance generally included on house and rental listings.

But Luup aims to bring the convenience of the area around the station closer to users, while maintaining the benefits of locations that are further away.

“For me, it should be possible to enjoy convenience, quiet and comfort all at once, and it is one of our goals to create a society where those who live far from the station can access our service close to their home and still experience that same level of convenience,” Okai said.

Hironori Kato, an expert in transport planning and policy at the University of Tokyo, agrees that the proliferation of shared mobility services such as Luup will allow users to effectively bypass congestion in crowded urban areas by filling in the gaps not already covered by inner-city public transport networks.

These “first/last mile” forms of transport could, Kato argues, lead to a shift in urban planning strategies away from a model that relies on car ownership, and instead move them toward a public-transportation oriented approach — something that Japan’s already extensive network of rail and bus services is well equipped to adapt to.

“There’s a tendency in conventional urban planning to overlook the importance of walking, cycling and shared mobility,” Kato said of a national transport system that, according to data from the latest Consumer Confidence Survey, still featured a car ownership level of just over 80%, despite the presence of Japan’s rightfully envied public transport.

However, with the rapid aging of the population, increasing global concern for the environment and the importance placed on convenient access to local amenities, Kato added, those attitudes are changing fast. Now, more and more people are showing an interest in a wider variety of transportation, including low-speed, short-distance options.

Shared mobility services — with others in Japan including Mobby and Swing — meet those demands by providing an alternative transportation mode that, if adopted widely enough, would free up space otherwise used for parking, reduce fears related to the spread of infectious diseases such as COVID-19 on public transport and limit carbon dioxide emissions from cars.

The digital aspect of shared mobility also lends itself to widespread adoption by a generation raised on smartphones and interactive apps — a significant benefit for platforms seeking to become a bonafide link in the national transportation system.

Shinya Nakagawa, global director of mobility at risk analysis firm Greater Than, highlighted in a video call how incentives for good behavior can be “gamified” through the addition of in-service mechanics such as scores and leaderboards that visualize an individual’s interaction with shared mobility services as part of a wider network of users.

“Let’s say, for example, you’re asked to please drive safely, or please drive in an eco-friendly way, what might inspire you to do it?” Nakagawa said. “If you drive in a safe and eco-friendly way, and are given a point, you’re going to adapt to driving in a safe and eco-friendly way, right?”

Hooked up to a wider network of users, he added, shared mobility becomes a “kind of play, a way to have fun” through competition with others that appeals directly to younger users, particularly in a country like Japan that is already home to a prominent and active gaming culture.

Yet there’s still some way to go before the wider public are convinced to give up their cars for daily rides on an e-vehicle — mainly given the lingering perception among the older generation in Japan that the e-scooters in particular are unsafe.

In September, a man in Tokyo, who is believed to have been drinking, died following a fall while riding a Luup e-scooter, while police had reported a total of 51 investigations of drunken driving on e-scooters this year as of Nov. 29.

Similar issues have been reported in cities overseas where shared mobility services are already prevalent, with municipal authorities in Paris currently mulling a ban on e-scooters after a rise in associated accidents over the past year, including a number of deaths.

Japanese shared mobility services have responded to questions of safety, particularly those related to drunken driving, by posting guards in certain high-risk areas to prevent use by anyone under the influence.

Additionally, Luup boss Okai hopes to keep developing his company's technology, adding additional features such as sensors linked to the vehicles in order to monitor the user's alcohol consumption level, while aiming to adapt the structure of his bikes and scooters toward a safer and steadier ride for older users.

“We would like to expand our business even further,” he said. “The larger the company is, the more vehicles we’ll be able to use, and the better the quality of each vehicle will become.”