This story originally appeared on WIRED Japan and has been translated from Japanese.

A project to develop autonomous vehicles for self-driving taxis has begun in earnest in Japan. The plan put forward by Tier IV, a startup specializing in autonomous-driving technology, has been selected for a demonstration project by the Japanese Ministry of Economy, Trade, and Industry. Now, a prototype development project has officially begun.

Tier IV became known for developing open-source self-driving software and conducting demonstrations of self-driving taxis in May and June in Odaiba, an entertainment district of Tokyo. At the time of those public experiments, the company had revealed its intention to develop a new vehicle designed for use in the self-driving taxi business. That plan has now begun to move forward in concrete terms.

The new vehicle that Tier IV is developing is a one-box-type electric vehicle that can accommodate four to six passengers in addition to a driver. It will be spacious enough for a family, yet it will remain maneuverable.

From the initial design proposal that Tier IV showed to WIRED, it appears Tier IV’s taxi will be a minivan-like EV with sensors attached to the body. The windows are large, and the interior looks open. In addition, at this stage, there is a high possibility that a driver’s seat will be installed for personnel to monitor the taxi’s autonomous driving behavior. A remote monitoring system will also be installed.

To develop the prototype model, the company will collaborate with Toray Carbon Magic, a company experienced in lightweight vehicle design using carbon-fiber-reinforced plastic molding. After conducting tests on the prototype, Tier IV plans to develop a mass-production version for the broader market. It will be sold exclusively for use as an autonomous taxi.

The timing for the completion of the mass-produced model has not been decided. Tier IV aims to keep operating costs—including the cost of the vehicle itself—at the same level as or lower than existing taxis.

Rides Begin in November

Tier IV will begin commercial operation of Japan’s first Level 4 self-driving taxi service in November at Odaiba, Tokyo. These public rides will happen while the prototype minivan is being developed, so for these early stages of the rollout, Tier IV will use the same vehicle it used in its demonstrations earlier this year: a mass-produced taxi vehicle called JPN Taxi. These compact vehicles are equipped with a lidar sensors and Tier IV’s self-driving software.

This commercial operation will be a joint venture between Tier IV and existing taxi companies, with the major taxi company Nihon Kotsu handling operations. A few self-driving taxis will be prepared and run on demand between Tokyo Teleport Station, Kokusai Tenjijo Station, and the Miraikan (Emerging Science and Innovation Museum) using a reservation and dispatch system.

However, the vehicles will have a person in the driver’s seat to monitor the autonomous driving situation. This is not only to ensure safe operation but also to demonstrate that drivers who do not have the knowledge or driving skills of professional taxi drivers can provide the service. The fare is still under discussion, but it is likely to be the same as that of a regular taxi.

The self-driving taxis will have a designated operating area that makes them similar to an autonomous bus service. However, the service has the advantages of being operated more flexibly than a bus and of providing rides in areas and at times when there are few buses or regular taxis. In addition, by directing autonomous taxis to simple short-distance transportation where there are many users, taxis driven by human drivers will be able to focus on “profitable” work such as long-distance travel.

Open Future

Both the development of autonomous taxi vehicles and the commercial operation service are considered important steps for Tier IV’s autonomous driving technology and its future business plans. This is because Tier IV intends to package and provide autonomous driving systems, autonomous taxi solutions, and autonomous vehicle hardware.

“We aim to package everything from the vehicle to the system so that we can start commercial operation of autonomous taxis within a few months of starting the project,” says Shinpei Kato, the founder, president, CEO, and chief technology officer of Tier IV. The Japanese government has set a goal of providing Level 4 autonomous transportation services in more than 100 municipalities nationwide by 2027, and Kato believes that Tier IV can contribute to the realization of this goal.

Tier IV aims to operate self-driving taxis commercially in three locations in Tokyo by 2025, including Odaiba as well as other central Tokyo areas such as Shinjuku and Minato. It’s likely that time periods and routes will be limited to avoid competition with regular taxis. These commercial services will serve as a showcase to promote Tier IV’s self-driving technology and self-driving taxi solutions to companies both in Japan and abroad.

Tier IV’s business model is important in this regard. The company has open-sourced its autonomous driving software, Autoware, so that it can be freely downloaded and used by companies and research institutions. By involving engineers and researchers from all over the world, Tier IV hopes to rapidly advance autonomous driving technology while keeping development costs down.

The company plans to implement Autoware in self-driving taxis and provide it to external parties as a technology solution while also offering the newly developed EV robotaxis as a complete package.

This allows companies to purchase just the self-driving taxi system from Tier IV, or to opt for the entire package, including the vehicle, or to develop their own autonomous vehicles using the open-source Autoware.

The company also hopes automakers will adopt Autoware to develop their own autonomous vehicles, and Suzuki and Isuzu Motors have already invested in Tier IV. In this respect, Tier IV’s strategy is different from that of Waymo , a US company that is vertically integrating the development of most of the technology required for self-driving taxis.

A Good Role Model

In rural areas of Japan, public transportation infrastructure such as trains and buses are being shut down one after another, and Japan’s aging population has resulted in a serious shortage of taxi and bus drivers. Given this situation, regulators have raised the possibility that self-driving taxis will no longer need approval from the Ministry of Land, Infrastructure, Transport, and Tourism if they are operate jointly with existing taxi companies.

Even now, self-driving taxis can be operated as long as there is a person in the driver’s seat who also acts as a supervisor, so robotaxis are easy to introduce into an area even if professional drivers are in short supply. Even if fully autonomous driving is realized, there is a good chance that it will be possible to respond by remote monitoring in some areas.

Tier IV hopes that by quickly demonstrating its model for self-driving taxis, more corporate partners will adopt the company’s technology and hardware to provide services. “We think it would be enough for us to commercialize our own areas in about three locations,” says Tier IV’s Kato. “By making this a reference model, we want to make it easy for partner companies to deploy their services.”

In other words, just as Google has developed its Pixel series as a model in the world of Android smartphones, it would make sense for Tier IV to package and provide everything from the platform to the solutions and vehicles needed for operation, and demonstrate their commercial operation as a package.

The company is also looking to distribute Autoware around the globe. “Japan is the only country that is showing the service as a reference model,” says Kato, “but we are considering providing software, hardware, solutions, and other things to the global market.” In fact, Autoware is most widely used in China and is spreading to the United States, Taiwan, and other countries.

“In the future, we will be able to flexibly respond to requests depending on the region and demand, providing only software, only parts, or even entire vehicles and systems,” says Kato. “Which part will take up more weight will depend on the country or region, and frankly we don’t know yet. Still, we want to be in a position to provide everything if there is a demand.”