We already have cars that don't need you to drive them: taxis. Where I live the various different competing taxi companies compete to give a pretty high level of service - I can order a cab via an iPhone app or through an IVR system that only requires me to press a single key if I want a taxi there and then - payment is to account (work) or chip-n-pin.
Even with a pretty decent taxi service I still own a car, as do most people I know.
So I suspect that even when cars become completely self-driving we will still generally end up buying the things for possibly less than completely rational reasons.
According to the article, at the end of a 12-hour shift, a driver goes home with $160 after paying $120-$130 to rent the cab & medallion and $8 for credit card processing. There's also gasoline costs, which the article doesn't give a number for, but as a guess, a driver might go through half a tank on a shift for $40, and that's in an inefficient large car with a V8.
So over half of the cost of an NYC taxi is the driver's labor, and a nontrivial portion of the taxi rental goes to pay for the taxi medallion, which has gone up in cost to a million dollars in recent years:
http://www.slate.com/articles/business/moneybox/2012/06/taxi...
The economics of taxi service in the US are largely driven by labor costs as well as regulations that have been perverted to funnel money to a rent-seeking set of license/medallion owners, not the running cost of the motor vehicle.
Why would you think that a self-driving car fleet will have less cost? They will be regulated just like taxis. Including insurance and most importantly medallions. Replacing the drivers will not cut the cost in an industry that creates artificial scarcity.
It will in countries that aren't completely bone-headed about it.
I guess a good measure of how corrupt a particular political environment is will be how long it takes to give in to the overwhelming reasons (ecological, economical and social) to allow the true, very low cost of self-driving cars to have its impact on the taxi industry.
I would be curious which countries those are? Is their a 1st world country that doesn't license their cabs to provide an artificial scarcity? Heck, some cities actually mandate the brand of car that can be used for a cab.
Clearly there are existing regulations that would have to be reformed - criminal record checks for self-driving cabs wouldn't make any sense, for example! What I think (and what I assume swombat means) is that these reforms will be made when self-driving cabs come on the market.
After all, why wouldn't they?
London is one place that doesn't have any limit or medallion system regulating the number of cab drivers - although they do have regulations regarding eyesight, criminal record and route-finding ability.
Some parts of the world don't have such silly laws. Arethuza mentions Edinburgh just has a £2k licence fee. That's a small part of the price and cost of operation of a car, particularly one that's self-driving and on the road 24/7.
At normal cab rates, this would bring in shitloads of money. So people would start cutting the rates. And cutting more. Soon, a £40 cab ride will cost £20... then £10... then £4...
When taking a cab for half an hour costs a couple of quid and the cab is there at the push of a button, you need a car even less (most Londoners already don't have cars).
Once this transformation starts hitting, some cities with politically corrupt systems will still maintain their protectionist laws... but for how long? The ones that keep them longest are de-facto the most corrupt (at least in transport policy/laws).
As far as I can tell, my home town of Edinburgh only has license fees that have to be paid by black cab and private hire companies - about £2000 or so (additional fees to license drivers as well). I can't see any mention of any artificial restrictions on the number of taxis operating.
The majority of the cost of a taxi is the driver. He has to be paid for a day's work, even when he spends most of that day waiting for a fare. No driver, no driver costs.
Also, many regions don't bother with the ridiculous monopoly system of "medallions". I can start a mini-cab firm in my area without any such artificial supply restrictions at all.
Even with a pretty decent taxi service I still own a car, as do most people I know.
So I suspect that even when cars become completely self-driving we will still generally end up buying the things for possibly less than completely rational reasons.