Microsoft made bank with the kinect. Also, google is in serious danger of being killed by facebook (more data = better search results), so google needs another huge profit stream. Running the entire transportation infrastructure can be that (there will be competitors, but with google's superior tech talent, their vehicles will be safer and hence win).

Do you think that google will sell the vehicles themselves or will they just license the technology to existing automakers?

If I were them, I would just run the vehicles as a fleet. The have many billions in cash and borrow any amount, so why not. Then innovate on the maintenance of the fleet with robots as well. Maybe start with franchising. Plus, they automatically set the rates for each individual journey dynamically and extract as much as possible.

Interesting, I can see how the taxi idea could be more efficient.

On the other hand cars are a great way of signaling things (like wealth, trendiness etc) and I think people like the idea of having their car.

Lots of people like having a car, but some people also like not parting with their money.