Waymo has spent years proving that driverless taxis can operate commercially in U.S. cities, and is now taking the model to Tokyo to test whether it can work there. Alphabet Inc.’s (NASDAQ:GOOGL) autonomous-driving unit plans to launch a fully autonomous commercial taxi service in the Japanese capital in 2027 alongside taxi-app operator GO and Nihon Kotsu. The service would start with a small fleet before gradually expanding to around 100 vehicles across key Tokyo neighborhoods.
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There is still regulatory work to do before passengers climb aboard, but if the launch proceeds as planned, Waymo will move from testing on Japanese roads to carrying paying customers without a driver behind the wheel.
Bull Case
Tokyo gives Waymo an opportunity to take technology developed and commercialized in the U.S. into a major international market. This isn’t a cold start, as Waymo began operating on Tokyo’s public roads in 2025, initially using human-driven Jaguar I-PACE vehicles to collect data. Over the past year, the company says its vehicles have also driven autonomously under the supervision of trained Nihon Kotsu personnel as it adapts its technology to Tokyo’s roads.
The commercial plan also gives Waymo strong local partners rather than requiring it to build the entire operation itself. GO brings its mobility platform and customer reach, while Nihon Kotsu contributes its local taxi operations. Riders are expected to be able to book autonomous trips through either the GO or Waymo app.
Waymo has already built meaningful scale at home. The company says it now provides more than 500,000 paid trips each week across its U.S. operations, and Tokyo gives it a chance to take that experience into a market with different roads, regulations and operating conditions. There is also a local problem the companies believe autonomous vehicles can help address. Japan faces an aging population and future labor shortages, including a shortage of drivers, and Nihon Kotsu President Yasuharu Wakabayashi said the autonomous service is intended to coexist with human-driven taxis rather than simply replace them.
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Bear Case
Investors should keep in mind that the date on the calendar isn’t guaranteed. The companies are targeting their first fully autonomous public rides in 2027, but they explicitly say that timeline depends on regulatory approval from national and local authorities and the successful validation of Waymo’s technology and joint operations. The initial scale will also be modest, as the partners intend to begin with a small fleet and only gradually expand to around 100 vehicles in selected Tokyo neighborhoods.
That matters when considering what the announcement means for Alphabet. Waymo has not disclosed expected Tokyo revenue, fares, profitability, or a timetable for expanding beyond that initial fleet. It would therefore be premature to treat the planned launch as a meaningful new earnings contributor for Alphabet.
Competition is developing as well. Nissan is separately working with autonomous-driving startup Wayve and Uber (NYSE:UBER) on robotaxis in Japan. Waymo may be targeting Japan’s first fully autonomous commercial taxi service, but it isn’t the only company pursuing the opportunity.
Conclusion
Waymo’s Tokyo plan is more important as a test of portability than as a near-term financial event for Alphabet. The company already knows how to operate driverless rides at scale in the United States. Tokyo asks a harder question: can the same technology and operating model be adapted to another country’s roads, regulations and transportation system?
Waymo isn’t jumping straight to hundreds or thousands of vehicles. It is starting small, working with established Japanese partners and making the 2027 launch conditional on regulatory approval and further validation. If those pieces fall into place, Tokyo would give Alphabet a fully autonomous commercial Waymo service outside the United States, which is something it didn’t have before. For now, that’s the part of the announcement worth watching, and not revenue projections.
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This article is originally published at Insider Monkey.
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