News and Trends

New Enforcement in Japan Has Become a Big Hurdle for these two Global Giants

Here's why regulations have been changed in Japan and what is causing a trouble to global companies
New Enforcement in Japan Has Become a Big Hurdle for these two Global Giants
Image credit: Shutterstock
Entrepreneur Staff
Correspondent, Entrepreneur Asia Pacific
2 min read

Two San Francisco-based tech giants Airbnb and Uber are reportedly stuck amid tough regulations in the world’s third largest economy Japan.  While the travel online marketplace Airbnb has scrapped its hotel bookings in Japan, Uber has reduced its food delivering due to the enforcement of “New Minpaku Law” in the country on June 15. The law states that the hosts (outstation companies) must have a permanent reporting number.

Under the existing laws, Airbnb had to cancel its thousands of listings and bookings done from June 15 to June 19, which didn’t meet the requirements. "This stinks -- and that's an understatement," fumed Airbnb in a report by AFP.

On the other hand, UberEats who made its entry into Japan in 2016 reduced its food delivery services effective from June 15. The ride-hailing company Uber has been a hit in Tokyo since the time it has arrived. Due to new regulations restaurants listed under UberEats had to bear the brunt.

Apparently, the new regulations have brought many outstation companies at standstill in Japan.  Here’s why regulations have been changed in Japan and what is causing a trouble to global companies.

About New Regulations in Japan

Japan introduced the 'New Minpaku Law' on June 15 which states companies must have a reporting number. The number must be on the listing and at the entrance to the property.

The outstation companies must have a business permit number. According to the officials, tourists staying in lodgings that break the rules won't be arrested or fined. But there are risks such as being asked to leave the premises or encountering resistance from neighbours.

After years of gloom, Japan has revived its economy in the East Asian market.  The existing laws in effect would restrict the market, which at this point in time would not work in country’s favor.

According to the former officials, the loosen laws will be a welcoming step for Japan to have an access to sharing economies. With more millennials getting involved in business, there is a great evolution in Japan’s economy in itself. The next generation in business is showing “greater interest” in shared economies, which would eventually help in growing cross-border trader without any major restrictions.

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