If anyone can make this work out to be used by the public, Google can. They seem to be fairly good at pissing off established business. (Though they're still learning as Android shows.) Demos are great, just reinforces that Google is really an AI Company.
Where my pessimism lies for this reaching the public even if it's technically sound is that there are a lot of established multi-billion dollar businesses to contend with. Insurance is a big one, traffic tickets are another.
I don't think insurance and traffic tickets are nearly as big of a roadblock as safety regulations for selling a computer that creates 2,000lb projectiles with humans inside.
Wouldn't it be fairly simple to run tests for awhile and give the thumbs up if the average, shall we say, carnage rate is lower than with human drivers? Seems like it would be a no-brainer.
And when there are inevitably problems (or even deaths) caused by the AI systems, it's not like car companies don't currently have liability for malfunctions in their designs. Seems it would be the same...
You obviously don't work in a highly regulated industry :-)
Things that seem like "no brainers" to software developers are absolute show stoppers to regulatory bureaucracies like the Department of Transportation.
It's not impossible and it will certainly happen eventually, but it will take years of proposals and studies for a new set of regulations to evolve that these cars will have to follow. Liability is a separate issue that the car companies are used to dealing with. Changing minds at the US DOT (for example) will be a lot harder.
Insurance is easy: Google provides the insurance. Looking at the market share and market caps of Progressive and Allstate, which together have an 18% market share, Google is larger than the entire US auto insurance industry.
Where my pessimism lies for this reaching the public even if it's technically sound is that there are a lot of established multi-billion dollar businesses to contend with. Insurance is a big one, traffic tickets are another.