If you had to invent the perfect place to roll out self-driving buses, Japan would be it.

The country boasts an immaculate and extensive road network. Much of the aging population relies on public transport to get around , especially in the countryside. And that customer base is shrinking, bringing in 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 is why SoftBank Group Corp. is building driverless buses, which it 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 can get away with a lower level of machine intelligence.