January 13, 2009


Car Sharing in Japan: Growing in Popularity, Integrating into Transport Systems

Keywords: Newsletter 

JFS Newsletter No.76 (December 2008)

Shifting from Car Ownership to Services and Functions

In order to create a low-carbon society, it is important to reduce the amount of carbon dioxide (CO2) emissions from transport. As a transportation mode that emits relatively less CO2, car-sharing schemes have been growing in the North America, Europe and Japan. Car sharing is a new idea of using just the services or functions of a car instead of owning one. It is said that the world's first attempt at car sharing started in 1987 in Switzerland.

How has car sharing spread in Japan so far? According to a survey by the Foundation for Promoting Personal Mobility and Ecological Transportation (known as the Eco-Mo Foundation), there were 19 car-sharing organizations in Japan as of August 2008, and a total of 522 cars were being shared by 3,875 registered members at 323 car stations. The numbers of cars and car stations more than doubled and the number of members increased by half compared with a survey in January 2007, only a year and a half earlier.

There are a number of reasons that car-sharing systems are growing in Japan. One is the recent soaring prices of gasoline and commodities.

Another is the growing general awareness of environmental issues and spread of eco-friendly lifestyles. Also, many young people are clearly less interested in owning cars than before. One could say that Japanese society is becoming more accepting of green lifestyles, sometimes described by a new business concept called "green servicizing," which refers to the use of the services or functions of products rather than the ownership of products themselves.

Green Servicizing Businesses:

The national government has recently begun to encourage car sharing as a means of public transport. It is setting the stage for spreading the idea of car sharing nationwide by supporting local governments that have promoted car sharing, and by modifying regulations.

In July 2008, Japan drew up an Action Plan for Achieving a Low-carbon Society to attain a long-term goal of reducing greenhouse gas emissions by 60 to 80 percent from the current levels. The government's strategy is clearly described in this action plan. For example, during fiscal 2008 (i.e., by April 2009) a study group to promote car sharing is to be launched, and by examining ways to address obstacles and increase convenience, it is expected to publicize both the environmental and economic benefits of car sharing. The government is also promoting Environmentally Sustainable Transport (EST) by measures such as encouraging people to shift to eco-friendly transportation.

Action Plan for Achieving a Low-Carbon Society

Advantages of Car Sharing

How can a car-sharing system reduce environmental impacts? In Japan, the CO2 emissions from transport sector amounted to 254 million tons in 2006, accounting for about 20 percent of total emissions, and half of the emissions from the transport sector were from family cars. A survey about car sharing by the Eco-Mo Foundation in 2005 showed that when car-sharing systems were introduced in urban areas, members' travel distances and number of cars owned dropped by 79 percent and 76 percent, respectively.

The number of car use by car-sharers in the survey dropped dramatically, while the number that used public transportation, cycled or walked increased. By travelling less, the car-sharers saved 450,000 yen (about U.S.$ 4,290) in costs per year and reduced their CO2 emissions from car use by about 30 percent (or 1.89 tons of CO2 equivalent annually).

The study thus showed that a car-sharing system can reduce the wasteful use of cars and bring about positive effects, such as (1) easing traffic congestion in urban areas, (2) supporting the use of public transportation systems, (3) contributing to urban environmental measures, (4) easing pressure on limited parking space in cities, and (5) helping reduce global warming by lowering CO2 emissions.

History of Car Sharing in Japan

In the United States and Europe, the idea of car sharing initially developed with the aim of reducing the number of cars owned. In contrast, when car sharing began in 1999 in Japan, it started mainly as a means of demonstrating and testing new technologies, such as Intelligent Transport Systems (ITS) and electric cars.

In 2002, some companies, including ORIX Co., ORIX Rental Car (current ORIX Auto Co.), NEC Soft Ltd., and NEC Co., established a joint venture called CEV Sharing Co. (CEV) to test whether or not the car-sharing business model used overseas could be successfully applied in Japan.

In 2007, CEV was integrated into ORIX Auto Co, which created a new car-sharing division within its rental car department. The company then launched a service with "car sharing" for short uses and "car rentals" for longer use, ranging from several hours to several days.

ORIX Auto Co.

In October 2007, ORIX Auto introduced a car-sharing system called "Petit Renta" in Kyoto City, having already launched in Tokyo, Kanagawa Prefecture, and Nagoya City. As of September 2008, it had placed 33 small cars at 24 traffic central locations in Kyoto, including JR Kyoto train station. Users are charged in 15-minute units.

Petit Renta (in Japanese)

Car-sharing systems are also growing to serve residents of condominiums in Japan. Forty buildings with a total of 80 vehicles nationwide already have a system or plan to introduce one by July 2009. Car sharing at condominiums can promote communication with other residents who share the cars. It can also give residents parking close to home, and alleviate the shortage of parking spaces.

Some companies and corporate groups are also shifting to car sharing.
Among 3,200 car-sharing members of services offered by the Orix Auto Corp., about 20 percent are corporate members (end of September 2008).
More and more companies are adopting this system to downside their fleets of company-owned vehicles and to cut costs.

Future Prospects

New car-sharing systems linked with public transport are emerging in Japan. For instance, a system founded through collaboration among industry, citizens and academia as part of the Demonstrative Model Evaluation Project for Consumer Sector Global Warming Prevention Measures, Carshare Kanazawa has started to adopt a type of prepaid travel smart card called "ICA" for a local bus operated by Hokuriku Railway Co., as the key for shared cars utilizing Orix Auto's service.
It also established an Eco Point system for car-sharing users, allowing them to use points earned to pay bus fares.

Orix Auto also started to adopt another type of travel smart card "PASMO" as a car key for shared cars. PASMO cards have been distributed to eight million users who use trains, subways and buses in Tokyo and the surrounding districts. The company expects this system allowing travel by trains for long distances and the use of shared cars at the destination to gain more popularity as an environmentally-friendly behavior common in Europe and the United States.

Possible measures to have car sharing take root in Japan may be to increase public awareness of car sharing and to secure parking spaces for car-sharing service providers, through cheaper fares of publicly-owned parking lots and tax incentives.

By incorporating car-sharing systems into local transportation systems, it might be possible to not only reduce CO2 emissions, but also to restore people-to-people connections by sharing something in common that society has come to neglect.

Related JFS article:
Car Sharing Gaining Popularity in Japanese Cities

(Written by Eiko Yukawa)