By the time Tokyo hosts the Summer Olympics and Paralympics in 2020, self-driving cars may be a feature on Japan's roads as local automakers work to develop the technology in the next five years.

Tokyo-based Robot Taxi Inc., though not an auto manufacturer, also hopes to launch a self-driving cab service by that time, which it believes will help reduce traffic accidents, improve mobility and energize rural areas.

While the firm says the technology is ready for practical use, hurdles remain, including the high cost of components and the need to amend traffic laws.