(Newswire.net — July 16, 2020) —

Japanese Car Rentals Being Used For More Than Just Driving 

The Japanese car-sharing business is facing heavy fluctuation in their profits because some drivers are not putting any miles onto their car rentals. Instead of using the vehicle to go to other places, many are using the cars for spending private time, as storage, or as a place for sleeping. With big names in the car-sharing business comparing data, the percentages are surprising. According to Asahi Shimbum, about 1 in 8 renters are not driving a single mile with their car rental.

Studies are being conducted to determine why this is occurring. The objective is to take steps in figuring out a middle ground wherein they will not lose revenues or customers. 

The Dawn of Car Habitation

Using a car to store items, or sleep in is referred to as car habitation. This is an inexpensive practice, where renting the vehicle for 30 minutes costs only 400 yen, which is roughly equivalent to four US dollars. Most car rental companies can be booked through a smartphone app, wherein they offer a quick delivery or an easy to find nearby pick up location.

This practice can be written off as a natural reaction to the limited space in large Japanese cities, and the long hours business professionals spend in busy metros. There is a need for places where overworked men and women can lay their head or eat their lunch. These already exist in Japan, where people can rent out napping pods by the minute.

Car-sharing companie like NTT Docomo Inc. and Orix Auto Corp are the ones filling this need because of their low costs, and abundance of car-share locations in Japan. This is a surprising and innovative idea from consumers. When one commodity becomes too expensive (storage, a bed, etc.), these consumers will look for a lower cost alternative in another market.

Car-Sharing Companies Left With Little Options

There is not much difficulty for Japanese car-sharing companies to nip this in the bud. Enabling a no-drive additional cost will make the car-sharing company less attractive to those who rent cars with no one driving. This may not be a bad idea, especially in keeping profit margins acceptable for owners, while not dealing with having their car rented for unintended uses. 

The business model of these companies are based on making more profits from driving fees rather than upfront rental cost. Those who leave the car sitting will not be meeting the expected rental margins laid out by these companies. When people rent the vehicles for non-driving purposes, it also limits the number of cars the company has to rent out as originally intended. Problems among insurance agreements could arise, depending on any damage that could happen to the vehicle. To learn more about the types of insurance all car-sharing companies need to have, contact a car insurance broker toronto.

Putting a restriction on the use of ride-sharing vehicles will affect usage. Japanese consumers who are using the cars for holding bags, or as a place for getting some rest will shift to the few companies that are not charging a fee. Or, they will have to find other inexpensive options.

Companies that do keep the current model will be the go to for this practice. These same consumers will also remember their loyalty to these companies when they really need to drive somewhere. After all, they already have the app downloaded and are familiar with the company’s policies.