Japan is being seen as the perfect place to roll out self-driving buses.
The country boasts an immaculate and extensive road network. Much of the aging population relies on public transportation, especially in the countryside, to get around. And that customer base is shrinking. Fewer passengers equals less fares.
As a result, only a third of the country's bus companies are profitable, forcing regional governments to step in to support them.
That's why SoftBank Group Corp. is building driverless buses, which the Tokyo-based company estimates can cut operating costs by half.
Self-driving cars, like those being developed by Uber Technologies Inc., Google and automakers have to be smart enough to traverse unpredictable environments. Buses, on the other hand, follow predetermined routes and thus require a lower level of machine intelligence. If the Japanese technology and telecommunications company succeeds, its automated buses could be navigating streets as soon as 2019.
"Japan's aging population is putting the country on the front line of a public transportation crisis," said Yuki Saji, 31, chief executive officer of SB Drive Corp., the SoftBank unit that's leading the project. "There is an opportunity for a rapid introduction of this technology. Bus companies want to improve margins, local governments need to cut subsidies for money-losing routes and residents demand convenience."
Introduced in April, SB Drive is a joint venture with Advanced Smart Mobility Co., a University of Tokyo artificial-intelligence enterprise being led by a Toyota Motor Corp. veteran. With a prototype already navigating a closed course, four Japanese towns and cities have signed up to test the vehicles on actual bus routes as soon as next year.
SoftBank plans to sell the self-driving buses to cities and transit operators. It's an opportunity to grab a piece of a broader market that's projected to be worth as much as $77 billion by 2035.
Some of the technical building blocks are already in place. Japan spent more than two decades building out a nationwide network of FM transmitters, radio and infrared beacons that track road and traffic conditions, called the Vehicle Information and Communication System.
Sensing an opportunity, others are already taking a serious look at driverless buses. Autonomous shuttles developed by Swiss robotics company EasyMile are already ferrying students around the campus of Wageningen University in the Netherlands. Daimler AG is investing $223 million in a city bus project, after debuting a self-driving prototype in July.
In a recent trial in Yazu, a municipality of 18,000, Saji and his colleagues were the only people on a 30-minute bus ride along one of the existing routes. "In places like that, grandpas and grandmas live by the bus schedule," Saji said. "In five to 10 years, when the rest of Asia faces its own aging populations, SoftBank will have a business ready to go."
SundayMonday Business on 09/12/2016