This is "Waku Waku Sonic Patroka" which when appropriatly translated, comes out to be "Waku Waku Sonic Patrol Car". For some reason, Sonic is helping out the cops in this mini kiddie game. The controls likely make the whole thing light up and do actions. It is large enough for adults inside though! Anyone can play!

The game begins with Sonic providing an introductory speech, then pulling out of a police station and hops into his patrol car. At this point the ride begins to move and the player can control Sonic's car as they please, toggling the siren on or off, moving left and right with the steering wheel to avoid cars, or even make Sonic briefly jump out of the car (this feature serves a more useful purpose once the climax hits).
Along the way, the action pauses to let a group of flickies cross the road. As the ride resumes, things remain peaceful for another short period of time, then Eggman shows up and starts shoving cars aside. The player is expected to then activate the siren and pursue him, occasionally jumping out of the car briefly to injure Eggman. When he is damaged enough, Eggman gives up and leaves. If no action is taken long enough, however, Eggman will get away. Either way, Sonic will pull up in front of the police station and the ride/game ends after Sonic gives an ending speech in Japanese, making this the first game where Sonic speaks.
Obviously with a name like that, and everything in Japanese, this one was mostly JP only. However, Working copies of the game have been found in Malaysia, Hong Kong, and Singapore. There's reportedly one in English (used for high tourism areas and possibly as a note for export) but it is also very rare as the whole exporting thing didn't seem to happen.