Google continues to make progress on computer-piloted automobiles, but as John Markoff details, substantial legal, regulatory, and technical hurdles remain before such vehicles could be introduced into wide use.
One of the biggest issues, per Atrios, is that there's a huge difference between building a transportation system for autonomous vehicles from scratch and integrating them into existing roadways. You could imagine Paul Romer getting permission to start setting up a Charter City somewhere five years from now, with part of the startup concept being that autonomous vehicles will be the exclusive motorized transportation option. That's a lot logistically easier to organize that simply putting some autonomous vehicles onto the streets of Chicago.
A related issue is simply that new things are held to a double-standard and this is particularly true in the realm of the automobile. A lot of the issues around autonomous cars amount to basically "but under some conditions something could go wrong and cars could crash and people die." Meanwhile, more than 90 Americans die each and every day thanks to automobile mishaps, and 1.2 million are seriously injured every year. There's a social convention in the United States that we don't talk about those 90 daily deaths as a serious problem, even though obviously if we had nine people getting killed by terrorists every month there'd be a perpetual state of freaking out. High-speed motorized transportation is a serious business, and conventional automobiles are not held to the same tough safety standards that we apply to most other products, so it's extremely difficult for something new to compete.
The last thing is that one of the things you'd probably like to do with an autonomously piloted car is build a fleet of them and use them to provide a taxi service. The Uber model plus computer piloted cars would be extremely attractive. This is, however, already an industry that's subjected to extensive regulation for reasons that have nothing to do with driver safety. The owners of taxi medallions in NYC have made major investments and fully intend to obtain the rents to which they're due. All across America different regulatory frameworks are in place that involve the interests of human cab drivers and human taxi license holders in different ways and people aren't going to give those interests up just because futurists like to talk about it.