Japan is preparing to launch its first fully autonomous commercial taxi service in Tokyo next year, addressing a growing shortage of taxi drivers amid advancements in driverless vehicle technology. The project is led by Alphabet’s autonomous driving division Waymo, Japanese taxi app operator GO, and taxi firm Nihon Kotsu. The initial deployment will involve a small fleet before plans to expand to around 100 driverless cars.

This development marks Waymo’s first commercial market outside the United States and tests whether the company’s business model, which currently operates more than 500,000 driverless trips each week across 15 U.S. cities, can be successfully adapted to Japan. Waymo estimates its service provides roughly 26 million rides annually in the U.S. Should the Tokyo rollout prove successful, it would signal the viability of autonomous fleets in a distinct regulatory and cultural environment.

Japan’s relatively slow adoption of electric vehicles contrasts with its active preparation for autonomous driving. The government has spent several years conducting trials and adapting regulations to enable commercial deployment of self-driving cars. The country’s unique structural challenges may accelerate adoption; notably, Japan faces a persistent shortage of taxi drivers, creating a demand gap that robotaxis could help fill.

Local automakers stand to gain significantly if autonomous taxi services become mainstream. Unlike privately owned vehicles, autonomous taxis can operate nearly continuously across multiple shifts, accumulating mileage faster and leading to shorter vehicle replacement cycles. This dynamic would generate recurring demand for new vehicles from manufacturers.

Japanese carmakers have already taken steps to enter this emerging market. Nissan, in collaboration with British autonomous driving firm Wayve and ride-hailing company Uber, announced a pilot earlier this year to offer robotaxi services in Tokyo using Nissan electric vehicles equipped with Wayve’s artificial intelligence driving system. Meanwhile, Toyota and Waymo agreed last year to explore the development of a new autonomous vehicle platform, signaling interest from leading industry players.

While some countries debate the social implications of autonomous fleets potentially displacing human drivers, Japan’s taxi labor shortage provides a compelling economic rationale to advance the technology. The forthcoming Tokyo pilot, involving Waymo, GO, and Nihon Kotsu, may serve as a pivotal test to demonstrate whether autonomous taxis can operate commercially in Japan’s urban environment and could influence the broader future of mobility within the country.