TOKYO (Reuters) - The self-driving car joint venture of SoftBank Corp and Toyota Motor will receive investment from a further five Japanese automakers, two sources familiar with the matter said, broadening backing for the all-Japan effort.
Mazda Motor Corp, Suzuki Motor Corp, Subaru Corp, Isuzu Motors and Toyota unit Daihatsu will each take a stake of a few percent in the venture, the sources said.
With the move to autonomous driving and electric vehicles creating ructions across the industry and spawning once unlikely partnerships, the venture, Monet, which is developing an on-demand self-driving service platform, hopes to help Japan’s auto industry ride the shift.
Monet, announced in October, added investment from Honda Motor Co and Toyota’s truck making subsidiary Hino Motors in March, leaving SoftBank Corp the largest shareholder with a 40.2% share and Toyota owning 39.8%.
When Honda and Hino joined in March, the total investment in Monet was 2.5 billion yen ($23.20 million). It was not immediately clear how much the five new partners are investing in the venture. Monet declined to comment on the investment, which was first reported by Nikkei. Mazda, Suzuki, Subaru, Isuzu and Daihatsu also declined to comment.
The venture’s head told Reuters earlier this month it was planning to expand its investor base. Monet hopes to export a basic version of the service to Southeast Asia in 2020 and aims to roll out on-demand bus and car services in Japan in the next year.
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THE three largest banks by assets in Singapore will be able to defend their market share against fintech competitors, despite the rapidly growing threats to their bank business from these companies, Moody’s Investors Service said in a report on Monday
This is partly because DBS Bank, OCBC Bank and United Overseas Bank (UOB) have abundant financial resources to invest in technology, whereas startups are facing increasing competition for funding, said Simon Chen, a vice-president and senior analyst at the credit rating agency.
Moody’s noted in its report that fewer fintech companies received funding in 2018 than in previous years. Moreover, even though the Singapore authorities are highly supportive of fintech innovation, they still restrict fintech firms from expanding into deposit-taking and lending so as to preserve financial stability, Mr Chen said.
While startups, mainly in the payments segment, have begun to gain traction with products such as GrabPay, their ability to disrupt the financial services sector in Singapore is also constrained by a high degree of banking penetration in the county and the three large banks’ strong franchises.
As a result, fintech companies are increasingly opting to collaborate with banks to jointly develop products, instead of competing with them for market share, Moody's said. For banks, such partnerships also enable them to streamline their internal processes. Equipped with vast financial resources, banks have been expanding their payment services in South-east Asia.
Their continued investments in digital transformation will enable them to defend their competitiveness, Moody’s said.
All three banks have led digitisation efforts in South-east Asia. They "have been channelling cost savings from efficiency gains through digitalisation back into technology investments", Mr Chen said. Such digitalisation efforts have helped the banks improve efficiency, because technology significantly lowers costs for acquiring customers and processing transactions. Digital customers are also more profitable than traditional branch users, because they generate more revenue as a result of closer engagement with their banks.
Moody's said fintech companies are attracted by Singapore's developed financial infrastructure and policy framework, and the gateway it provides into the South-east Asian region.
The number of fintech ventures in Singapore increased by around 60 per cent to 756 at the end of October 2018, up from 479 at end-2017, Moody’s noted in its report. The industry is also becoming more diverse. Prior to 2017, fintech investments in South-east Asia were primarily for digital payments and mobile wallets. But as the payments market matures, new fintech investments are increasingly flowing into emerging areas such as blockchain, online lending platforms, investment technology, robo advisory and artificial intelligence. Particularly, more than one-third of fintech funding in Singapore last year was for technology development related to financing for SMEs (small and medium enterprises) and wealth management services. DBS shares were trading down one Singapore cent at S$24.80 as at 1.32pm on Monday, while UOB rose 27 cents to S$25.26 and OCBC gained 11 cents to S$10.89.
Home sharing is a great way to experience Taiwan. During my two trips last year to Kinmen, the Taiwan-governed archipelago off the coast of China’s Fujian Province, I stayed in the same bed and breakfast, Shangheryuan. In between sightseeing excursions, I chatted with my host Chen Shu-chen, a Taichung native, about everything from where to catch the best view of the Xiamen skyline to the mercurial fog that sometimes descends over the islands.
When the fog is thick, flights are cancelled. Her advice: choose flights early in the day so you can hop on a later one if there is a cancellation.
Chen’s culinary prowess even made me reconsider my misgivings about youtiao, the deep-fried Chinese dough sticks. She paired them with the best fish congee I’ve ever tasted. If there ever is a campaign to make carbs great again, she should be involved.
Shangheryuan is a licensed bed and breakfast listed alongside major hotels on several travel booking sites serving the Taiwan market. Ironically, despite its focus on close contact between host and guest, the inn is not listed on Airbnb, known for “home-sharing.”
In fact, many of Airbnb’s listings appear to be vacant studio or one-bedroom apartments in downtown Taipei City. The owners, who live elsewhere and rent the apartments out for a few nights at a time, are not engaged in “home sharing” any more than any landlord who leases a property to a long-term tenant. Therein lies the regulatory dilemma: How to support innovation – of which the sharing economy is a prime example – without being unfair to existing stakeholders such as hotels? Taiwanese law does not typically permit private residences to be rented out for less than 30 days at a time. Since 2015 the government has been promising to crack down on illegal hotels, but progress has been slow. Given substantial demand in Taiwan for short-term accommodations, some analysts expect that the government will follow the Japanese example and legalize home sharing – but with strings attached.
In 2015, Taiwan passed an amendment to the Tourism Development Act that more clearly defined hotels and raised fines on operators of illegal short-term tourist accommodations to as much as NT$500,000 (US$16,230). Yet in practice, relatively few fines have been issued, according to sources who follow the industry.
One challenge for regulators is that an Airbnb listing is not required to list its exact address. A guest often only learns that information after paying and contacting the host directly. “Someone living in a building would have to report one of their neighbors to the authorities, and not everyone wants to take that responsibility,” says Lawrie, a long-term Taiwanese Airbnb host who asked to be identified only by his English name.
In December 2015, the Taipei City government ordered Airbnb to remove 95 percent of its 4,200 short-term home rental listings. That scared some additional people off of Airbnb.
But the fear must have subsided. There are currently hundreds – if not thousands – of Taipei apartments available for short-term rentals on Airbnb. Certainly many visitors to Taipei are seeking comfortable downtown accommodations for a lower price than a comparable hotel room and don’t care about interaction with a host. “It’s attractive to guests but not fair to hotels that have much higher costs and must abide by strict regulations,” Lawrie notes.
Airbnb did not respond to requests for information, but an August report in TechNode said the company’s Taiwan business has surged since 2015. Citing company data, it said 1.3 million foreign tourists – 12 percent of the total – used Airbnb Taiwan listings in 2017.
But some industry experts raise doubts about the future prospects. Chen Ming-ming (陳明明), founder of the Taiwan-based travel-activity platform kkday, notes that the hotel industry, which is already suffering from a supply glut, has stepped up pressure on the government to crack down on Airbnb. Traditional tour operators also oppose Airbnb as its customers bypass them and book their own accommodations. Not all hoteliers oppose Airbnb. “There’s no direct impact on our business,” says Harvey Thompson, general manager of the five-star W Taipei. Rooms at the W, ranging from NT$10,000 to $15,000 (US$325 to US$485) a night, are positioned for the premium market. In contrast, most Airbnb Taipei listings are in the NT$2,000-$6,000 range (US$65-$195). Still, residents of apartment buildings may be disturbed by the coming and going of Airbnb guests, Thompson points out.
Tourism Bureau crackdown
This June, the Tourism Bureau launched a campaign against unlicensed accommodations which will reportedly include comprehensive inspections of suspected illegal hotels. “While tourists may want inexpensive accommodations, there are many problems associated with illegal hotels and short-term rentals,” including safety issues, tax avoidance and disruptive behavior of guests in residential buildings, the Bureau said in an emailed response to a request for comment from Taiwan Business TOPICS. For those reasons, such accommodations have been banned worldwide, and “internet platform operators should abide by Taiwan’s regulations on hotels and short-stay rentals,” the Bureau added. In July, local media reported that the Tourism Bureau cut the utilities at an unlicensed property in Kaohsiung’s Zuoying District after the owner failed to heed an order to cease operations. Lawrie points to Taiwan’s low salary levels as the reason many people seek to supplement their earnings with income from Airbnb rentals. A typical Airbnb listing of a whole apartment in downtown Taipei could bring in NT$30,000-$40,000 (US$975-$1,300) a month, which can make a big difference for someone earning just NT$40,000 (the approximate median salary) from a full-time job, he says. One Airbnb host based in northern Taiwan, speaking on condition of anonymity, said he has listed a central Tainan property on Airbnb since 2014 to fill gaps in occupancy by a regular tenant. “Demand is strong enough to make it worth listing,” he says. The host admits that the property isn’t licensed as a hotel. “Can anything on Airbnb be licensed in Taiwan?” he asks.
The technical answer is “yes.” But most of those licensed bed-and-breakfasts, like Kinmen’s Shangheryuan, already are partnering with other travel-booking sites that have been established in this market for longer than Airbnb and are less likely to work with unlicensed operators.
At the same time, Lawrie acknowledges that real-estate speculation has played a large role in Airbnb’s success in Taiwan. “Some people in Taiwan still see real estate as a way to get rich fast,” he says. “It’s a part of our culture that’s not easy to change.” In practice, the hosts able to post the most lucrative earnings from Airbnb listings most likely already possess substantial assets. For instance, a host with five Airbnb listings in Taipei’s Xinyi and Daan districts could earn up to NT$150,000-$200,000 a month (US$4,870-$6,500), Lawrie says, but would have needed the capital to acquire the properties in the first place. The most desirable apartments are in modern high-rises, where units rarely sell for less than NT$15-20 million (US$487,000-$650,000). Some in the tourism industry urge the government to revise hotel regulations to better accommodate home sharing. “It would be beneficial to consumers if home sharing [including empty apartments] was legalized here – there’s a huge demand for it,” says C.K. Cheng, founder and chief executive officer of AsiaYo, a Taipei-based booking site for licensed vacation rentals.
Japanese model
Taiwan reportedly is looking at Japan’s home-sharing act, passed in June, as a possible model. Under that law, individual rooms can be rented out for a maximum of 180 days a year, and hosts are required to verify the identity of their guests and keep a guest registry. Ahead of the law coming into effect, about 40,000 Airbnb listings (80 percent of the total) that would lack permission to operate under the new legislation vanished from the platform. Cheng lauds Japan’s move to regulate home sharing. “Sure, there will be some transitional pain, but now the government can monitor the industry,” he says. That will strongly reduce safety and tax problems, as well as conflicts between guests and hosts or guests and residents of a building, he adds. An August Bloomberg commentary said that the new regulations are professionalizing Airbnb in Japan. “Gone are the stock photos of tourist sites and blurry smartphone pictures that leave you wondering what the place actually looks like,” the article said. “Every listing now also displays a registration number with the local government and they will keep a copy of your passport.”
With the 2020 Tokyo Olympics approaching, Japan had good reason to boost accommodation options for visitors. The country already faces a shortage of hotel rooms amid an unprecedented tourism boom. Indeed, by some accounts Japan is the world’s fastest growing tourism destination. In 2017, 28.7 million foreign tourists visited Japan, an increase of 334 percent since 2010, according to the United Nations World Tourism Organization.
In contrast, Taiwan’s tourism boom, fueled by a surge of Chinese tourists during Ma Ying-jeou (馬英九)’s presidency, is over, at least for now. Since 2015, overall Chinese tourism has fallen by about 40 percent from a high of four million arrivals. The primary reason for the decline is Beijing’s tightened restrictions on group tours to Taiwan (the independent traveler market from China remains robust). Even if tourism from other markets is stable or growing, it is difficult to make up for the precipitous fall in the number of Chinese group tours. Last year, Taiwan’s inbound tourism revenue decreased about eight percent to US$12.3 billion (NT$380 billion). Compared to Japan then, Taiwan’s tourism market is currently in a very different situation. And while Airbnb often depicts itself as an insurgent in a battle with an entrenched incumbent, the hotel industry, there is another party that benefits from short-term rentals: the real-estate sector. Given sufficient demand, property owners can earn more from renting out apartments to short-term guests than to long-term tenants. Lawrie says he expects the Taiwan government to crack down hard on unlicensed short-term rentals over the next two years. He expresses hope that Airbnb can return to its roots as a home-sharing platform that allows people with an adventurous spirit to connect. After all, not everyone is comfortable staying with a stranger in that person’s home or hosting a stranger. And there’s no way to make a connection with an absent host. “If you ask me, home sharing just might be the best way to make new friends,” he says. “It’s how I met my wife. She was my Airbnb guest.” |
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