Archive for the ‘Travel & Transportation’ Category

How employer transportation allowances helped create commuter hell

Tuesday, October 14th, 2014

Rush hour at Yurakucho Station

Rush hour at Yurakucho Station. By nesnad [CC-BY-3.0], via Wikimedia Commons

According to the Ministry of Health, Labor and Welfare, about 86 percent of Japanese companies pay their employees’ tsukin teate, or “commuting allowance.” To many Japanese the high rate will probably be less surprising than the fact that not all companies pay it. It’s a common misconception that the allowance is somehow a legal mandate, but it isn’t.

Employers don’t have to pay their workers’ transportation expenses, but most do. In fact, as the so-called lifetime employment system that was so central to Japan’s postwar economic growth has slowly been abandoned over the past two decades, more companies have opted to either cut back on transportation allowances by limiting the amounts, or eliminating them altogether. The above figure is for regular full-time employees, and the growing trend among employers now is to hire non-regular employees, either as temps or contract workers.

But while transportation expenses are not legally mandated, they are regulated. Companies can write them off as business expenses, but only up to ¥100,000 a month per employee. If an employee’s commuting costs exceed ¥100,000 in a month, the excess is subject to tax as if it were income.

That’s a lot of money to spend on commuting, even in Japan, and, for sure, the vast majority don’t spend that much. But inadvertently or not, the tsukin teate system has contributed directly to the concentration of businesses in major cities, thus exacerbating the problem of long commutes and over-crowded public transportation.

If employees had to pay their own transportation expenses, which is the case in most developed countries, they would naturally find work that is as close to their homes as possible or move their residence to within a comfortable commuting distance of their work place.

In other words, they would balance their job particulars — working circumstances and salaries — with commuting conditions — length and cost. In any case, there would likely not be the situation that you now have in the Tokyo Metropolitan Area, where commutes can take two hours one way on trains that are often over 150 percent capacity.

In its series commemorating the 50th anniversary of the Shinkansen “bullet train,” Tokyo Shimbun described how the iconic high-speed express gave rise to a “new way of working.” One article profiles a man named Akira Wachi, who has commuted from his home in Numazu, Shizuoka Prefecture, to his job in the Osaki area of Tokyo for 26 years via Shinkansen. The trip takes 90 minutes one-way. In 1976, his company, which happens to make electrical devices used in Shinkansen, transferred him from Tokyo to its Numazu factory. Six years later, thinking he would not be transferred again, he built a house. He was 32 years old. However, six years after that he was transferred, back to the company’s headquarters in Tokyo. With two children in elementary school he didn’t want to move his family again so he applied for permission to commute by Shinkansen. His request was approved.

His commute is now ¥87,600 a month, and his company bears the entire cost. (Reserved seats, like Green Cars, are not paid for by tsukin teate) In fact, he is not the only employee who commutes by Shinkansen. There are 112 other people in the head office who do so as well. The cost to the company is obviously formidable, and surely adds to the cost of its products. The various JR companies that operate the Shinkansen have encouraged commutes by adding LAN capabilities on its trains. One man, who commutes every day from his home in Shizuoka to Tokyo, says he gets a lot of work done on the train even before he arrives at his office.

The article goes on to point out that during the bubble era, when property values rose greatly, salarymen built homes farther from city centers, and could do so because their companies paid for their commutes, so in a sense tsukin teate also contributed to skyrocketing property values. As more Shinkansen lines were built, the train was used more and more as a means of commuting. Takasaki Station in Gunma, which is one hour and 11 minutes from Tokyo Station by Shinkansen, sells about 5,700 Shinkansen commuter passes per month.

In order to attract new residents to its area, the city of Saku in Nagano Prefecture offers a commuting subsidy: up to ¥25,000 a month if the new resident’s employer does not pay the full amount of the commute via the Nagano Shinkansen, which stops at Saku-Daira station. Since the monthly commuting cost from Saku-Daira to Tokyo is ¥132,830, even if the employee’s company pays the full ¥100,000, the employee will have to pay ¥7,830 a month out of pocket. And it isn’t just Tokyo. Some cities located along the relatively new Kyushu Shinkansen offer subsidies to commuters.

It’s notable that the Kyushu Shinkansen was mainly built with tourism in mind and is currently operating in the red, which brings up another by-product of the tsukin teate, which is the enormous revenues of railways in the major industrial corridor between Tokyo and Osaka. JR Tokai, which operates the highly profitable Tokaido Shinkansen between those two cities, says that revenue from monthly and multi-monthly passes increased eleven-fold between 1987, when Japan National Railways was privatized, and 2013.

On the plus side these profits have led to even better service in this corridor, but because all the money is concentrated there, regional railways are going out of business, forcing even more people to move to the cities. Many will say that’s simply the way the market works. Exactly.

Foreign tourists expected to take up (some of) the slack in consumption

Monday, October 6th, 2014

Everyday low prices: Duty Free store at Narita Airport

Everyday low prices: Duty Free store at Narita Airport

According to a survey of 12,000 tourists in 2013 carried out by the Tokyo Metropolitan Government, the Chinese spend more than any other group, which isn’t surprising. What is surprising is by how much they outspend other nationalities.

On average, a Chinese visitor spends ¥191,741 in Tokyo. The average spent by all foreign tourists in Tokyo is only ¥46,546, which means Chinese spend about three times as much.

After China, the most spent is by Singaporeans (¥135,377), and then Spaniards (¥129,558). Another notable aspect of Chinese spending is that the bulk is not spend on accommodations or dining, but rather on souvenirs, about ¥122,000. The most popular area for Chinese shoppers is Ginza, because that’s where all the luxury brand stores are.

The government wants them to spend even more, and is thus expanding the list of items that foreign tourists can buy without having to pay consumption tax. Previously, consumables like food, liquor and cosmetics were not exempt from CT when bought by foreign tourists at stores in Japan, but since Oct. 1 they are.

The main beneficiary of this new regulation is department stores, which have been doing badly since the consumption tax went up in April. One of the reasons consumables weren’t exempt before was that there was no way to check if the items were consumed in Japan or overseas, and anything consumed in Japan should be subject to tax. But many Chinese buy food and liquor in Japan as souvenirs for relatives and friends.

The discount is given at the point of purchase, which means the store has to be registered to waive the consumption tax. They check the buyers passport to make sure he or she is not a Japanese national. Technically, the item can be checked at the airport to make sure it wasn’t consumed before leaving the country, but that sounds almost impossible to do.

At present foreign tourism is one of the only bright spots in terms of revenues. In August, spending by foreign tourists was 40 percent more than it was last August, and ¥4.7 billion of it was spent in department stores alone. These numbers will probably go up more now that the yen is dropping.

The Ministry of Economy, Trade and Industry estimates that the new duty-free rule will mean a loss of ¥9 billion in CT revenues for the year, but it will also mean a boost in sales of about ¥78 billion, which means it will make up for at least some of the domestic consumption that was lost after the tax increase was implemented.

The duty free system was established in the early 1950s, when less than 40,000 foreign tourists visited Japan in a year. Department stores have always been lobbying the government to expand the list of exempt items, even though administering the system is bothersome for retailers, as well as for tourists, who have to fill out forms. METI is thus thinking of streamlining the system even more by 2020, when the Olympics will be held. At present 5,777 stores belong to the duty-free system.

Annals of Cheap: Eco Rent-a-car

Monday, September 22nd, 2014

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.

CONTINUE READING about Eco Rent-a-car →

Will rice cookers save the Japanese home electronics industry?

Monday, July 14th, 2014

Pricey rice: High function rice cookers on display at a discount electronics store

Pricey rice: High function rice cookers on display at a discount electronics store

It’s been well documented that the Chinese are considered the saviors of the Japanese tourist trade, but there’s more to the story than just tour numbers and hotel bookings. An article in the July 10 Asahi Shimbun described an odd and recurring dilemma at Kansai International Airport. Chinese tourists are buying Japanese-made rice cookers at the airport’s souvenir shops in large numbers. Since the purchases are made after the travelers have gone through immigration processing, they don’t have to pay duty, but at that point they’ve already checked their luggage, and the rice cookers in their boxes won’t fit into overhead bins in airplane cabins.

Some of the rice cookers will fit if they’re removed from the boxes, but people on these flights are buying more and more of the home appliances so in some cases there is no room for any of them, which means flight attendants have to assist in having these patrons check the items so that they can put them in the cargo hold, and as a result more and more flights back to China are being delayed.

Rice cookers became a very popular item among Chinese tourists in 2010, when visa rules were relaxed to allow travelers who weren’t members of organized tours to come to Japan freely. One of the clerks in the Osaka airport souvenir store told Asahi that he once saw a Chinese tourist buy six of the devices at one time. One Chinese businessman who comes to Japan on a regular basis says he’s always getting requests from acquaintances to buy rice cookers for them. This souvenir store, in fact, sells an average of 10 cookers a day, most of them high-end models, which can cost as much as ¥90,000.

Last April, during cherry blossom viewing season, the store sold an average of 20 a day. A representative of Yodobashi Camera Multimedia Umeda in Osaka told the paper that whenever Chinese tour groups visit the discount electronics store they usually buy more rice cookers than they have members. Yodobashi has a duty-free system for tourists, but actually most Chinese prefer buying their rice cookers in the airport, since the price isn’t any different and they don’t have to lug the things around with them prior to departure. But there is the problem of carry-on.

Why rice cookers? There are few appliances that reflect Japan’s so-called Galapagos design mindset as thoroughly as rice cookers. They basically do one thing: Cook Japanese rice in a way that only Japanese people prefer. The rest of the world doesn’t eat much sticky, white, short-grained rice unless it’s combined with sauce or other prepared foods, and that includes the rest of Asia. Even China, from which Japan first imported rice-growing techniques, isn’t big on rice as a separate dish. It prefers long-grain rice, which is always prepared with something else in mind, and while it is considered a staple, at mealtime it isn’t as important as other dishes. In the northern part of China, many people don’t eat rice at all, since they grow more wheat there due to the colder climate.

But as more and more Chinese tourists have come to Japan, they have discovered the unique joys of sticky white rice.  As incomes rise in China, people are broadening their food choices, and one of those choices is short-grain rice. If it’s Japanese grown, it’s even better, despite the high price. And the best way to prepare it is with a Japanese-made rice cooker.

According to the Japan Electrical Manufacturers Association, more rice cookers are manufactured in China than in any other country in the world, but the vast majority are inexpensive models with few features. The first Japanese rice cooker was made by Toshiba in the mid-1950s, and since then they have become extremely sophisticated. Some even include porcelain containers and functions that allow the user to make rice that tasted as if it were made the old-fashioned way, in a kamado, the traditional, charcoal burning Japanese stove. Now, apparently, Japanese manufacturers are incorporating functions that will appeal to Chinese users, such as the ability to cook long-grain rice and different kinds of porridge.

In its own peculiar way, the Japanese rice cooker has done more to extend a specific Japanese sensibility than any electronic device since the Walkman. As any Japanese person over a certain age will tell you, the preparation of rice is the most important culinary consideration with regard to the Japanese menu. Cooking rice the proper way is difficult and time-consuming. You have to wash the rice throroughly until the runoff water is utterly transparent. Then the rice has to sit in that water for a certain length of time. The pot used for cooking rice, a kama, is only used for rice. First the rice in the water is boiled and the flame reduced — which, before gas stoves, meant removing pieces of charcoal from the kamado. And the person doing the cooking has to stay and monitor the flame for at least 15 minutes.

Consequently, the rice cooker was a huge boon for housewives. It not only freed up their time so that they could cook other dishes simultaneously, it freed up cooking space. Most Japanese kitchens with natural gas have only two burners. When makers added timing devices, rice cooking became exponentially easier because it cut the time needed for preparation, especially in the morning when housewives had to prepare breakfast and lunchboxes. Reheated cold rice is normally not acceptable. That’s why the next development was the “jar,” a special device for storing already made rice to keep it warm for later in the day without drying out. When the rice cookers themselves incorporated jar functions, the appliance had become perfect.

But only perfect to Japanese people. Most everyone else in the world didn’t eat rice this way, but apparently the Chinese are catching on. It’s too much to hope that their sudden affection for Japanese style rice will single-handedly save Japan’s home electronics industry — not to mention Japanese agriculture — but you never know. Look what the Walkman wrought.

Japan tourism still suffers from a credit card gap

Monday, June 30th, 2014

So close, and yet so far: Shimosa Manzaki Station on the JR Narita Line

So close, and yet so far: Shimosa Manzaki Station on the JR Narita Line

In a letter to the editor published in the June 23 Tokyo Shimbun, the writer relates an anecdote about two American women who while waiting at Narita Airport for a connecting flight to the states after arriving in transit from a vacation in Southeast Asia, decided to kill time by taking in a local onsen (hot spring bath). After checking the Internet with whatever mobile devices they had with them, they found that the nearest one was at Shimosa Manzaki station, one stop away from the Narita city terminal on the JR Narita Line. Since they weren’t going to be in Japan long they didn’t bother getting yen, and were able to buy JR train tickets with their credit cards. They could also use their cards at the onsen itself.

However, when they went back to Shimosa Manzaki station to make the return trip to the airport after their bath they discovered that their credit cards were no good. Neither the ticket vending machine in the station nor the employee selling tickets at the window would accept them. The letter writer happened to be at the station at the time and understood English. She was kind enough to buy them tickets so that they could get back in time to catch their flight.

This incident highlights a major gap in the government’s plan to increase foreign tourism in Japan. Last year, for the first time ever, the number of foreign visitors exceeded 10 million, thus encouraging the Japan National Tourism Organization to aim for 20 million by 2020, the year Tokyo will host the summer Olympic Games. Significantly, 80 percent of the tourists who came to Japan last year were individual travelers, meaning they didn’t come as members of organized tours. Individual travelers book their own accommodations and arrange their own transportation with the idea of playing things by ear and enjoying their travels at their own pace.

Credit and debit cards make it easier since they allow for more flexibility than cash or travelers checks, which have to be purchased through foreign exchange outlets. As we’ve mentioned before, most Japanese bank ATMs don’t accept foreign credit cards, but even more vexing for individual tourists is that many Japanese businesses, including some who cater to tourists and especially those outside the large metropolitan areas don’t accept credit cards.

Hotels tend to be OK, but as the two American women who visited Shimosa Manzaki found out, a lot of transportation outlets aren’t. As far as JR goes, larger stations in the cities accept credit cards, but most others don’t. If you’re buying a shinkansen ticket, it’s usually OK to use a credit card, even with the special vending machines, but the Midori Kenbaiki, the special vending machines for long-distance travel, are complicated to use even for Japanese and don’t have English instructions.

Foreign tourists can buy Pasmo and Suica prepaid IC cards just like Japanese residents do, and they certainly make life easier, but both cards require a ¥500 deposit that may put some tourists off. Both cards can also be tied in with credit cards so that they recharge automatically when their value drops to almost nothing, but that option is not available to tourists. Mitsubishi Research has found that almost 90 percent of the travelers it surveyed from Taiwan, South Korea and the U.S. buy some sort of transportation pass, be it the JR rail pass or one-day Metro tickets, so obviously it is the sort of service that’s appreciated. But while these same people express a high level of satisfaction for the transportation service that’s offered, they also find it difficult to make sense of the network.

Specifically, they have difficulty figuring out how to get to specific destinations and how to buy tickets, especially from vending machines, even when English explanations are available. Moreover, while they appreciate the various passes on offer, they don’t often know which one is best for their needs. In Tokyo, should they buy one-day passes for both subway lines or just one?

The research arm of Mitsubishi UFJ found that 88 percent of foreign tourists use guidebooks, maps, smart phone apps or some combination of the three, but they would like to be able to do everything using their mobile devices. Some businesses have already said they plan to increase the number of free wi-fi hot spots by 2020, which is a good start. But making it easier to use credit cards more flexibly would also be a big incentive for visitors since it would save them time, trouble and maybe even money.

Japanese low-cost carriers hit hard by pilot shortage

Sunday, May 25th, 2014

Onward and upward: Plane taking off from Narita airport

Onward and upward: Plane taking off from Narita International Airport

Low-cost carriers (LCC ) — airlines with cheaper fares than standard carriers — came relatively late to Japan. Peach Aviation was the first in March 2012, followed by Jetstar Japan, an affiliate of Australia’s Qantas Airlines, in July of the same year, and then Air Asia Japan, which has since changed its name to Vanilla Air, for some reason. (Skymark, which also charges less that most airlines, is technically not an LCC.)

As of March, LCCs accounted for 7.5 percent of domestic passengers, which isn’t bad, and growth seemed assured, but suddenly all three bargain airlines have hit a wall. Vanilla recently announced that it will cancel 154 flights, or 20 percent of its schedule, for June, and Peach said it would curtail its own schedule by more than 2,000 flights through October. Jetstar had planned to expand its flight coverage this year but has since postponed those plans.

The reason is a serious shortage of pilots, in particular flight captains. Vanilla says it has had personnel problems recently due to pilots quitting or taking sick leave, but its president, Tomonori Ishii, has assured the public that it will address the problem by “borrowing” personnel from its parent, ANA, but on a temporary basis. Of Peach’s 52 captains, eight were out of action due to illness or injury, but, in fact, the problem is more intractable.

CONTINUE READING about Japan's pilot shortage →

Golden Week activity influenced more by logistics than by economics

Saturday, May 3rd, 2014

Too late to stop now: Travel brochures for Okinawa and Hokkaido

Too late to stop now: Travel brochures for Okinawa and Hokkaido

This year’s Golden Week holiday isn’t as golden as it normally is owing to the way the national holidays that make it possible fall in relation to the days of the week. Showa no hi (the Showa Emperor’s birthday) was on a Tuesday and Constitution Day on a Saturday, so there was enough time between them for people to work, which means they didn’t get those days off. That left a measly 4-day weekend to get all the things people usually do during Golden Week done — like visit their home towns — and the truncated time period meant more highway congestion in a shorter time span, which the media treats with such predictable urgency every year that it has become something of cultural touchstone. In any case, all that gasoline wasted in 45-km traffic jams and constant stops at expressway service areas doesn’t make up economically for the money lost during the reduced holiday.

The Japan Travel Bureau declared that the Golden Week holiday started on April 25 and ended May 6, despite the fact that, for the first half of that period, schools weren’t closed the whole time so it wasn’t a bona fide “break” for families with children, regardless of whether or not dad had to work.

According to a JTB survey of 1,200 people who presumably already knew what they were going to spend over the holiday, the amount expended per person for those who planned to travel domestically was ¥34,400, or 4.2 percent less than last year. For overseas travelers the amount was ¥249,500, which represents an increase of 8.1 percent. The peak days for domestic departures were May 3-4, and for foreign departures May 2-3, thus proving that the first half of the holiday was virtually meaningless. This concentration of recreation into such a short period will likely spawn even more post-GW stories than usual on the spike in attendant divorces and job resignations.

CONTINUE READING about Golden Week 2014 →

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