According to Zhito Finance APP, USA tech giant Google (GOOGL.US) subsidiary Waymo announced earlier this month its plan to begin testing Self-Driving Cars in Tokyo, Japan in early 2025, marking the company's first step towards expanding into international markets. However, Bloomberg columnist Catherine Thorbecke believes that Waymo's Self-Driving Cars tests should take place outside of Tokyo.

Thorbecke stated that running Self-Driving Cars in densely populated urban areas will face technical difficulties. However, Self-Driving Cars can find a place in Japan. With an aging population and the Japanese government prioritizing addressing labor shortages, Self-Driving technology has great potential. Thorbecke suggested that Waymo could start by providing services to rural Communities. Waymo's Self-Driving Cars would operate more easily in these sparsely populated areas while also filling gaps in public transportation.

Slowing down in Tokyo is wise for Waymo. The company stated that there are currently no plans to provide services to customers in Tokyo, but is collaborating closely with local taxi giant Japan Taxi and ride-hailing app GO to prepare for testing its Jaguar I-PACE Self-Driving Cars on the streets of Tokyo. Initially, these cars will be manually operated by taxi drivers to map areas such as the port area, Shinjuku, and Shibuya.

Waymo's ride-hailing service currently operates in parts of Phoenix, San Francisco, and Los Angeles. Even in Los Angeles, the most populous city among these American cities (with a population of fewer than 4 million), it is difficult to compare with Tokyo, which has 14 million residents. Introducing Waymo vehicles to small and medium-sized cities in Japan would provide a more comparable testing ground for its first international trial.

Thorbecke remains cautiously optimistic about the development prospects of Self-Driving Cars, despite the technology sometimes facing criticism and industry executives like Elon Musk regularly failing to deliver on promises regarding when this technology will be realized. Theoretically, Self-Driving taxis seem like an ideal choice for Japan. However, the Industry faces a series of obstacles both domestically and internationally, leaving Waymo with little room for error in its entry into Japan.

General Motors announced earlier this month that it would halt its Cruise Self-Driving taxi business due to high development costs. Meanwhile, its partner, Honda Motor in Japan, also announced it would stop funding Cruise. Honda had previously revealed plans to deploy a Self-Driving Car in downtown Tokyo by 2026, but later postponed this timeline.

In the USA, collisions and safety incidents involving Self-Driving Cars often become national news, but Waymo's current safety data shows that automated driving cars are safer than those driven by humans. Globally, texting while driving or driving under the influence are the most common causes of traffic accidents. However, building public trust will still take time. Today, developing Self-Driving Taxi technology is already extremely challenging and costly, and a single high-profile accident could deal a devastating blow to a company's ambitions and reputation. Japan has traditionally taken a particularly cautious approach to emerging technologies.

Despite the shortage of taxi drivers, even non-automated ride-hailing companies like Uber Technologies face challenges in the regulatory environment in Japan. Currently, Uber can only connect customers with taxi drivers. However, Uber's delivery division, Uber Eats, has successfully collaborated closely with local businesses and stakeholders, integrating into the Japanese market and meeting Consumer demands.

Thorbecke emphasizes that Waymo can also fill these gaps by meeting the needs of local residents and collaborating closely with policymakers. Starting from rural and semi-rural areas where residents need alternatives to the declining public transportation services may be a good strategy. These areas may not be the major cities sought by Waymo, but could bring unexpected surprises.