This is a question that was asked some time ago on Quora and I gave the following answer:

Why is Google’s self-driving cars project important? There are so many reasons. Here are some that I get just on top of my head:

Saving lifes (and costs)
Over 90% of all car accidents are due to human error (in the US alone around 4mio crashes). In comparison to that Google’s self-driving car was involved in 12 accidents with all of them not the fault of the car since public testing started 7 years and nearly 2mio miles ago (mostly rear-enders when the Google car was at a stop at a traffic light).
Besides the human toll of 32,000 deaths in the US and 2.31mio people injured, the costs are $1 trillion(!). See more details here Car Crash Costs and Statistics.

With other words, just by replacing every human driven car with a self-driving car, we could save the lives of 30,000 people, 2.17mio not injured, and save $940bn in car accident related costs.

Fewer cars on the streets
A typical car is operated every day just for 1-2 hours. That means it’s not used for 22-23hrs per day. Autonomous vehicles could be used for picking up other passengers. This means we need much fewer cars on the streets.

Many more people can use it
Today people who can drive cars are the ones who have a driving license. People with disabilities (blind…), the elderly for whom it’s not safe to operate a car anymore, or children could use autonomous cars on their own.
Google showed a video with their car where a blind man uses it. He is really excited because this gives him back some of the autonomy that he has lost with losing his eyesight, as now he can go and visit his friends.

Today’s roads and traffic infrastructure is build for too many cars and for human drivers. When you have fewer cars on the street ypu wouldn’t need that many lanes and parking structures anymore, signal lights and traffic signs would mostly become obsolete. Self-driving cars are able to coordinate their driving through observing and/or communicating with other vehicles.  You could imagine street crossings with cars that work like this (ok, maybe not the people in between 😉

https://www.youtube.com/watch?v=ufK2XRGUjuc

Saving fuel
Autonomous cars would also use fuel much better (be it battery or gasoling). Because of the synchronized drive with other cars they would have more constant speeds, could use each others shadow to reduce wind resistance etc.

Saving Time
Think of the amount of time that you are wasting driving. If you are commuting every day, you certainly hate the traffic jams. You could use your time not only better (read, work…), but also you would lose less time, as traffic jams with autonomous vehicles would become a thing of the past.

Traditional car companies are finally forced to innovate
And finally Google – not a traditional car company – disrupts the other car companies, who have found many excuses over the years why the autonomous vehicle is not possible or too difficult to build. Nobody told Google that it’s impossible, so Google just built it. And that has now the traditional vendors in panic. Mercedes has nothing (forget the F015: it’s a shiny concept car where you have to bring the CEO to the CES to hide the fact that your innovation department sucks; instead they are creating fancy animated videos instead of doing).

Those traditional car companies became so arrogant and narrow minded in their thinking that they forgot why they are in the business after all.  Instead of understanding that they are in the business of providing solutions for a connection problem (connecting people with others), they talk about “joy of driving” or so, missing the fact that many people don’t enjoy driving and the youngest generations actually sees a decline in drivers license holders: Report Finds Americans Are Driving Less, Led by Youth
That has now led to frantic activity by other car companies, when seeing how far the Google self-driving car is. Audi most notable is closest to Google’s technology.

From a competition perspective Google has been a boon for us, as they forced car makers to finally get their shit together.