Sonic Racing Shift Up is viewed from a third-person perspective, which creates an odd environment as the interior of the car is featured as the frame of the gameplay. In this game, the player, who is always Sonic the Hedgehog, has to shift gears in a kart as quickly as possible to beat Shadow, all while getting the timing just right. No left or right steering is featured in the game. Ghost data can be uploaded to and downloaded from a remote server so that it is possible to play against people all over Japan. The player can also use earned Rings to tune up their karts and make them faster.
Similar to real standard transmission cars, Sonic Racing Shift Up has the player release the acceleration key upon shifting gears. The real-world similarities end here though, as there is no clutch.
A speedometer and tachometer are present at the bottom of the screen, with the gear shift placed on the left to align with the Japanese road format. The top of the screen features a timer in the center, with a simple two-part progress bar displaying both the player and the opponent's distance travelled in relevance to the total course length.
Sonic Racing Shift Up features multiple different game modes, with these including the following:
- RACE: The standard racing game mode.
- Change Gear Ratio (ギア比の変更 giahi no henkō?): Adjusts the value of each of the five gears for different levels of power.
- Tire Selection (タイヤの選択 taiya no sentaku?): Here the player can purchase tire upgrades for their car with Rings, though they only last one race.
- Engine Selection (エンジンの選択 enjin no sentaku?): Here the player can purchase engine upgrades for their car with Rings.
- Virtual Match (Virtual 対戦 Virtual taisen?): Ghost data of other players can be downloaded and raced against, with the data being deleted upon closing the app.
- Sonic Cafe (Japanese) (archived) at