Singapore, with its limited land and workforce, is hoping that autonomous vehicles will encourage its residents to use more shared vehicles and public transport, and avoid further congestion on its roads.
"Trying to look for bus drivers, truck drivers - big challenge for us," said Pang Kin Keong, permanent secretary in the ministry of transport.
"We don't have a huge population and these are not some of the professions which Singaporeans aspire to," Pang said after taking a ride in SMART-NUS's driverless car - a modified Mitsubishi Motors electric vehicle with a top speed of 30 km per hour (20 mph).
The government and port operator PSA Corp also said on Monday that they would seek proposals to design and implement autonomous truck platooning trials, in which a human-driven truck is followed by other driverless trucks.
Autonomous vehicles could spur the mass-market adoption of ride sharing, ultimately resulting in a marked reduction in personally owned vehicles and in the total number of cars on the road, at least within cities, according to a Boston Consulting Group report in April.
Google and a number of automotive manufacturers and suppliers have said the technology to build self-driving cars should be ready by 2020.
The Singapore government said in June that it was seeking ideas on how autonomous vehicle technology could be harnessed for more land transport options.
Singapore's Land Transport Authority said it had received proposals from eight applicants, including Uber Technologies, BMW and the Toyota group's trading arm, Toyota Tsusho Corp.