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Annals of Cheap: Eco Rent-a-car

September 22nd, 2014 by

All you need to know: Sign outside Eco Rent-a-car office in Ota advertising prices

All you need to know: Sign outside Eco Rent-a-car office in Ota advertising prices

Since selling our car some years ago we’ve made do with public transportation, bicycles and our own four feet to get around, even after we moved out of the city. It hasn’t been as much of a hassle as you might think, but, then again, we’re easy about such things. Still, once in a while you need a car.

Several weeks ago we had to go to Ota in Gunma Prefecture to do some research. Ota is the home of the manufacturer Fuji Juko, whose most famous product is Subaru automobiles. Our mission in Ota would take us to two locations, and since we don’t have a car we had to play out our itinerary beforehand to make sure we would be able to get around. Getting to Ota from where we live wasn’t a problem at all. From Kita Senju in Tokyo, which is convenient from where we live, we caught the Tobu express train to Ota and got there in about an hour.

Our first destination in the city itself was on another local Tobu train line that connected to Ota Station, but there is only one train an hour. That station is 5 km from Ota Station, so walking was not a desirable option. The bus system also seemed dodgy, which is often the case in towns where large car makers are the main source of employment. Sometimes you can rent bicycles near a station, and they usually cost between ¥1,000 and ¥2,000 for two hours or so, but usually it’s a place that receives a lot of tourists, which doesn’t describe Ota at all.

We considered taking a taxi and estimated that the first leg of our trip would cost at least ¥3,000. When we were finished with our research at that location, we would have to call another taxi to take us to our second destination. Of course, when you order a taxi in Japan by phone they tack on an extra fare segment. We figured it might cost ¥5,000 to get to the next place, so that would already be ¥8,000 even before we found a way to get back to Ota Station for the return trip home.

So we decided to rent a choinori (short drive) car and almost accidently came across Eco Rent-a-car, which we’d never heard of but happened to have an office right at Ota Station. Much more interesting than the location, however, was the price: ¥980 for three hours. Was that right? There had to be some sort of catch, even if it was for the smallest model, a mini-car (k-car, in Japanese). You even got a 5 percent discount if you reserved online, so we did. Naturally, all the cars Eco provides, including an electric model, are made by Subaru.

The car was waiting for us when we arrived, all gassed up. We opted out of supplemental insurance, which means we rented the car for the minimum, but then we worried that it might take more than three hours to finish our work, so we signed up for six hours, the next choice on the fee menu, which is ¥1,880.

If you rent the smallest car, a Stella, for a full 24 hours it only costs ¥4,280, which is about what we paid last year when we rented a car for a few hours from Toyota Rent-a-car. A mini wagon is only ¥4,980 for 24 hours and a truck or van (mini, naturally) ¥5,200. Comparing Eco prices with other budget rent-a-car companies we found that, based on time, Nikoniko may be cheaper with its bottom offer of ¥2,525 for 12 hours, but you have to rent the vehicle for 12 hours. Eco is the only one where you can get that low a price for a very short-term rental.

As it turned out we estimated wrongly. The places where we did our research weren’t as far as we thought, and traffic was light, so we returned the car within three hours, and only paid ¥400 for the gas we used. When we parked the car next to the office, basically a prefab metal shed, we noticed that it was right next to the Ota Station taxi stand and wondered how the cabbies felt. There’s really no comparing price, when you think about it, and you don’t need a reservation, though you do have to be a member before you show up at the rental office, which means applying online first. And you don’t even need a credit card when you show up, just your drivers license. We asked the woman in the office if Eco was the cheapest rent-a-car service in Japan, and she smiled and said, with disarming honesty, “Actually, I don’t know.”

Unfortunately, Eco Rent-a-car isn’t nationwide. In fact, it only has two outlets in Gunma — Ota and Ashikaga. On the Internet it appears to have several outlets in the Kansai area, as well using the same logo and offering the same prices. But when we called one of the Kansai offices the person who answered vehemently denied any relationship, saying that they just happened to have the same name and logo, which is difficult to believe. Great— or desperate — minds think alike.

Mail order scofflaws are the exception that proves the rule

September 15th, 2014 by

The gods know if you're honest: An unmanned farm stand in Inzai

The gods know if you’re honest: An unmanned farm stand in Inzai

A recent article in the Asahi Shimbun described a small cross section of consumers who take advantage of a peculiar aspect of mail-order sales in Japan. Some small- and medium-sized sales agents who do their business over the Internet have problems with customers who don’t pay. In most cases, Internet and mail order sales are done on a prepaid basis: The buyer either provides credit/debit card information or makes a bank/post office money transfer prior to the item being shipped. But a few work on what can best be described as the honor system. They send the item to the buyer with a bill that the buyer pays after receiving the item. Sometimes the bill has a handling fee attached and sometimes it doesn’t.

According to the Asahi article, some people don’t pay up, and perhaps never intended to. A non-profit organization called the Mail Order Unpaid Protection Network (MOUPN), which monitors such scofflaws, estimates that mail-order sales companies lose about ¥20 billion a year to such people.

Asahi, in fact, found one, though he seems reluctant to admit it. In the article, a reporter visits an unnamed man “in his 50s living in an apartment in Tokyo.” The man receives an order of green tea by courier, but the reporter notes that the name on the package is that of a woman. “I made the order on behalf of a friend,” the man explains. When asked why he didn’t use his real name, the man doesn’t answer. Other packages arrive addressed to different women. When asked what’s in one of them the man shrugs and says, “Maybe food?” He insists that he will pay for it but usually “just forgets.”

CONTINUE READING about abuse of Japan's honor system

Casino tax study exposes pachinko to greater scrutiny

September 8th, 2014 by

Where's the money? Pachinko patrons at an off-site exchange booth

Where’s the money? Pachinko patrons at an off-site exchange booth

In line with plans to make casino gambling legal in Japan, the government needs to come up with some sort of scheme to tax gambling receipts, but even before they do that they have to address another problematic potential revenue source: pachinko. As it stands, pachinko winnings are not taxed and pro-casino forces are thinking of implementing a 1 percent levy on those winnings, so they went to the National Police Agency and asked for figures to see what kind of tax revenues they could expect. An NPA representative told them, seemingly with a straight face, that they don’t keep such statistics since there are no winnings.

Classic pachinko is like pinball in that the player earns points by being able to send balls into certain holes, which gives him more balls to play with. In gambling terms, a player wins when he ends up with more balls than what he started with. However, pachinko parlors cannot reimburse the player for the balls he wins. Instead they give him tokushu keihin (special premiums) — ball point pens, lighter flints, etc. — in exchange for balls. Then, he can take those premiums to an off-site, unaffiliated shop that buys them with cash. The shop then sells the premiums back to a wholesaler, which, in turn, redistributes tham back to pachinko parlors.

This “three-shop exchange system” (santen kokan hoshiki) bypasses anti-gambling laws because the venue where the customer plays the game does not offer cash rewards. Everyone understands this system and how it works, but the police representative told the group of lawmakers that they don’t have figures because “we don’t know anything about places” where pachinko players exchange prizes for money.

According to the Asahi Shimbun, the lawmakers were “disgusted” with this ingenuous display of “tatemae” (official principle). The group, established last February, believes a 1 percent tax on pachinko winnings would generate ¥200 billion a year in revenues for the government, which is important since the present administration has decided to reduce the amount of corporate tax it collects and has to make up the shortfall somehow. Consequently, according to the Asahi, these lawmakers have to “destroy” the illusion that people don’t exchange pachinko balls for cash, which means they have to publicize the three-shop system and explain it for what it is, which is gambling by indirection.

The system was devised in Osaka in the 1960s. At the time, players exchanged the premiums they won for cash directly from organized crime members. Later, the police forced underworld elements out of the business and entrusted the exchange system to local chapters of the Japan War-Bereaved Families Association, which consists of people who lost heads-of-household and other loved ones on the front lines in World War II.

It was a form of public welfare, and at this point the NPA acknowledged, albeit tacitly, that pachinko exchanges weren’t strictly illegal any more. Eventually, they set up their own bureaucratic organization, the Pachinko Gyokai Dantai (Pachinko Industry Group), and staffed it with retired NPA officials to administer the exchange system. Some media have said that profits from the system go into the police pension fund and other NPA-related schemes. In any case, the police have never allowed anyone outside this organization to have anything to do with the system.

So if the government passes a law to tax pachinko winnings it would be an automatic admission that pachinko is gambling, so there is a fundamental disconnect between the government and the police with regards to the game. This could spell trouble for the proposed Casino Promotion Law, since foreign companies want to invest in casinos but will certainly ask why their businesses are taxed and pachinko parlors aren’t. That’s why the government wants to clarify the situation. On July 24, lawmakers essentially told the police that if they cooperate they won’t be held responsible for the last 30 years of looking the other way with regards to a semi-legal gambling system, but the NPA seems loath to admit as much.

In a separate interview with the Asahi, pachinko writer Pokka Yoshida explained the situation in more detail, saying that the the police-controlled Pachinko Gyokai Dantai isn’t, as some may think, corrupted by the pachinko industry itself. In actuality, they control the industry, which is in thrall to the three-shop exchange system. If the police take that system away, the industry is nothing, so they do anything the police ask.

In Yoshida’s words, the pachinko industry is in a constant state of crackdown. The relationship started in 1985 when the Law to Regulate Businesses that Affect Public Morals (fuzoku eigyo-ho) was revised. Police said they were going to be more aggressive about controlling pachinko, and later introduced a prepaid card system for buying pachinko balls in parlors.

The person who promoted this system was Katsuei Hirasawa, a Diet politician who was once an NPA bureaucrat. The idea was to understand exactly how much money pachinko parlors were making, since the industry was famous for fudging accounts and evading taxes and sending money to North Korea, where many people in the industry had families. In order to spread the use of prepaid cards, the police controlled the manufacture of certain new types of pachinko machines that allowed proprietors to adjust the odds of winning so that they could “incentivize” their parlors: Players are always looking for machines with better odds of winning. Police made sure that when these machines were manufactured, they couldn’t accept cash, only prepaid cards.

When pachinko became a “social problem” in the late ’90s, according to Yoshida, the police, through the PGD, had some 700,000 “socially problematic” machines removed from parlors. As it happens, these were cash machines, thus establishing the prepaid card system as the standard. But now, Yoshida says, the actual pachinko industry is trying to get away from police control, and so they are working with “the political world” behind the scenes to break free of the PGD. The police, understandably, are resisting.

Prep schools succumbing to more than economic reality

September 1st, 2014 by

In recent weeks the yobiko Yoyogi Seminar announced that it would be closing 20 of its 27 schools nationwide by March of next year. The reason is clear and has been for years: enrollment is dropping with no bottom in sight.

Yoyogi Seminar in Tsudanuma, Chiba Prefecture, which is one of the branches scheduled to close

Yoyogi Seminar in Tsudanuma, Chiba Prefecture, one of the branches scheduled to close

The term “yobiko” is sometimes translated as “cram school” and sometimes as “prep school,” and so they tend to be mixed up with juku, another education-related term translated as “cram school.” Practically speaking there is no real difference, since both forms of enterprise prepare students to take entrance tests for higher institutions of learning. But juku tend to be associated with elementary school and junior high school students, while yobiko are more often attended by high school students who want to get into name universities.

Just as often they are used by high school graduates who are doing the same. Since these grads are not attending a for-credit school at the time, they are referred to as ronin, the word that described masterless samurai in the past. And in a sense it is the loss of ronin that made Yoyogi Seminar realize its future was in jeopardy. This past spring, according to the education ministry, 80,000 ronin took college entrance tests. In 1994, the number was 280,000.

The obvious reason for the loss of ronin is that the so-called “narrow gate” for entering universities has widened over the years. As the birthrate continues to remain low the number of available students has dwindled, and at the same time the number of universities has actually increased, from 552 20 years ago to 781 as of the beginning of this year. Schools, especially those lower on the prestige scale, are desperate for paying students and thus have eased requirements for admission. Some don’t even require tests any more, but accept recommendations or school performance records. And without the entrance testing system most yobiko have no reason to exist.

CONTINUE READING about cram schools and ronin →

European winemakers fret over competition from Chile

August 25th, 2014 by

The competition: Wines from Australia, Chile and France with retail prices below ¥1,000

The competition: Wines from Australia, Chile and France with retail prices below ¥1,000

During the first half of the year, sales of wine from Chile exceeded those of wines from Italy, thus making Chilean wine the second most popular imported wine in Japan, and apparently, Chile is now gaining rapidly on No. 1, France. The main reason is the Chile-Japan Economic Partnership Agreement signed in September 2007, after which the tariff on Chilean wine started to decrease gradually from the standard duty on foreign wines of either 15 percent of import price or ¥125 per liter. Right now the tariff rate for Chilean wines is 5.8 percent, and it will be zero in April 2019.

According to a Jiji Press report, the further the tariff drops, the more sales increase. More significantly, the amount of wine being imported has gone up. In 2007, when the EPA went into effect, Japan imported 10,517 kiloliters. But 2013, the volume was 36,435 kiloliters, which is an average annual growth rate of 20 percent. For the first half of this year alone, 17,349 kl entered Japan, and since the end of the year is the big season for wine, it’s clear that this year’s volume will exceed last year’s. And note that France exported 19,093 kl to Japan in the first six months of 2014.

Nevertheless, importers have told Jiji that the EPA isn’t as big an influence as it seems. One wine industry association said that Chile’s product is more suited to Japanese tastes, whatever that means. But the fact is that other wine-making countries and regions are paying close attention to the Japanese market and may be worried about Chile’s ascendance. For one thing, while sales of alcoholic beverages in general have been on the decline, the consumption of wine has been going up. At present, the average Japanese person consumes a little less than three bottles a year. Consequently, Japan signed another EPA with Australia in July. According to the terms of the agreement, the tariff on Australian wine will disappear in seven years, which is faster than the rate reduction with Chile.

So Europe is especially anxious to get its own EPA hammered out, since it’s losing ground to these New World winemakers. Wine and cheese are two of the main products under discussion.

It may already be too late. According to a report in the Hokkaido Shimbun, Hokkaido Prefecture’s most prominent convenient store chain, Seico Mart, has seen a 10 percent increase in the sale of Chilean wines over the past year, or one-fourth of the chain’s entire wine sales revenue. That’s even more than French wines. The newspaper narrows the appeal down better than Jiji, saying that Japanese people prefer the slightly sweeter flavor of Chilean wine. But the real reason is the price. The bestselling wine in the chain is a Chilean wine that goes for ¥480.

A common retail belief when it comes to selling wine to people who aren’t connoisseurs in Japan is that ¥1,000 tends to be the limit, and Chilean wine is consistently below that ceiling.

Whatever you do, don’t call Nestle’s coffee ‘instant’

August 15th, 2014 by

According to the business magazine Toyo Keizai, on July 24, Nestle Japan announced that it was quitting four industry groups it belonged to: the Japan Fair Trade Coffee Conference, the All Japan Coffee Association, the Japan Instant Coffee Association and the Japan Coffee Importers Association. These groups have, according to Toyo, had problems acknowledging Nestle’s description of its new manufacturing method for coffee products that it started using last September.

Nestle's Dolce Gusto capsule-style self-service machine set up in a grocery store

Nestle’s Dolce Gusto capsule-style self-service machine set up in a grocery store

Nestle no longer calls its Gold Blend and Nescafe Excella brands “instant coffees,” but rather “regular soluble coffee,” and insists that others do the same. Two months ago, these associations revised their industry fair competition rules, saying that they couldn’t allow Nestle to use such a description in their advertising, so Nestle decided to not work with them any more.

Nestle says the manufacturing method is different, so it has a right to call its coffee something different. Most coffee called “instant” these days is made by freeze-drying liquid concentrated coffee liquor. Soluble coffee, however, is a “unique” blend of pulverized roasted coffee beans and dried coffee concentrate. To the layman and, obviously, other members of the coffee industry in Japan, that description doesn’t qualify as much of a distinction, but Nestle wants to stress that the new method makes for coffee that is closer to the real thing, meaning coffee brewed from ground roasted beans.

An executive of the All Japan Coffee Association explained to Toyo that his group’s reluctance to accept the new designation is based on complaints it’s received from consumer groups that say people may buy Nestle’s new product under the mistaken assumption that it’s “real regular coffee.” And as far as the new designation goes, people who don’t know what “soluble” means may think that regular coffee grounds dissolve in hot water, which, of course, they don’t. In any case, “soluble” is a pretty good description of instant coffee in general, so the distinction is moot.

But Nestle Japan can pretty much do whatever it wants since its products account for 70 percent of the — pardon us — instant coffee market in Japan. It wasn’t until 1960 that the importation of coffee beans to Japan was liberalized. The next year importers started bringing in instant coffee, and by the middle of the decade Nestle’s Nescafe was the best-selling brand in Japan, as it was in the world.

Then, in 1967, Nestle Japan started selling Gold Blend, the first instant coffee to use the freeze-dried method developed by Nestle at its headquarters in Switzerland. The Japan affiliate was nervous, though, because it thought Gold Blend would “cannibalize” sales of Nescafe, so it made two different advertising campaigns: Nescafe for everyone, Gold Blend for more discerning consumers.

The Gold Blend commercials became famous for using well-known “artistic” talent, like novelists, classical musicians and kabuki actors. The ads were a success. Instead of eating up sales of Nescafe (which soon became Excella) Gold Blend’s sales augmented them. Eventually, Excella had a 50 percent share and Gold Blend a 20 percent share.

CONTINUE READING about Nestle Japan →

Local municipalities vie for your ‘hometown tax’

August 11th, 2014 by

Screen shot of web portal site for products being offered as gifts in exchange for "hometown tax" donations

Screen shot of web portal site for products being offered as gifts in exchange for “hometown tax” donations

The ruling Liberal Democratic Party is already thinking about next year’s local government elections and in order to help their candidates is studying a possible increase in the maximum tax deduction afforded to people who contribute “hometown taxes” (furusato nozei), a system that was implemented in 2008 to help regional municipalities struggling with budget shortfalls.

Because an increasing portion of the population is concentrated in large metropolitan areas, local government tax bases are eroding. The hometown tax diverts some of the money people pay to big city governments to these smaller municipalities in the form of donations. In order to make the system attractive to taxpayers, the central government offered deductions not only for national income taxes, but also for local income taxes.

Taxpayers can donate funds to a local government that is different from the one where they live, and despite the name of the system it doesn’t have to be their hometown. It can be any locality. Say you live in Tokyo but you want to help out a town in Fukushima devastated in the disaster of 2011, something that many people have used the furusato nozei to do. If you donate 20,000 to that town in Fukushima through the hometown tax system you can get a deduction off your national tax bill this year, and since local income taxes are based on national income taxes, this deduction, as well as a separate deduction for charitable donations, is reflected in your local tax bill the following year, which will be lower that it would have been otherwise as a result. So for the ¥20,000 donation, the taxpayer ends up with an ¥18,000 tax savings (¥20,000 minus a ¥2,000 handling fee).

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