Uber drivers at first were mostly just driving in their spare time, but over the years the professionals came in and crowded them out.
The lesson here is that it takes work to provide a level of service that consumers are willing to pay for. That work is best done through organization and professionalization. Some guy renting his car out during the work day isn't going to find it profitable enough to continue doing when he has to compete against dedicated on-demand rental services.
It's like you're saying I shouldn't bother with my zero effort $100-a-month passive income just because somebody else is making $200-a-month with higher margins.
Is that crowding out supported by any data?
Heck, why have driveways? In cities, at least, I could fully imagine new townhouse developments operating more like apartment buildings: one central parking lot for the "pool" of (mostly) driverless cars. Your car drops you off at your door and then parks in the pool; then comes back out to get you in the morning.
* A large percentage of people will want to have their own car because they don't want to put up with the occasional hassle of unavailability of rental cars during a peak time, and/or occasional long waits for the car to reach them (particularly when they are being picked up in un-dense areas). And before you hand-wave this away, note that the more of a cost advantage you give to rental cars (ie, the higher the utilization of those cars), the more of a disadvantage cost/wait time will be.
* People -- and very especially families with children -- also value cars as a mobile depot for their stuff. If you have kids of certain ages, this is practically a necessity. I definitely am not going to screw around with not just a carseat but like a dozen books and snacks and wipes and cups and so forth every time I get into/out of a rental car.
* Then cleaning and status and all the other things that people regularly bring up here.
* To address the mobile depot use case, I've heard of proposals to have storage areas (possibly trunk, but not necessarily) that are only accessible by the owner, not by renters. Even that may not be perfect though, I do see your point.
Is there a sweet spot where you still experience significant cost reductions but the inconvenience is small enough that you don't mind it? Well, certainly, for some people! But I think the number of people is going to be a lot smaller than many commentators think.
(The only cases I see where there's no increase in the rides-for-hire business after full automation is if the cost of cars drops to the point where there's very little incentive to try to reduce the costs for most people. Given that cars are quite expensive now, that seems unlikely. I can construct a scenario, but you basically have to believe that, first, the additional cost for driverless sensors+software is very low, second, that driverless software is so safe that you can drastically decrease physical safety features on cars, and third, probably that automation drives significant GDP growth).
It's not that hard. For one thing, you don't need to increase the price much, you just need to increase it a little so that you push cost-over-everything riders out of the queue. There are enough of those that whatever capacity is left should be plenty.
And you are worried those riders who were pushed out of the queue will go back to car ownership, but they are by definition cost-over-everything people, so of course they won't do that. If they could afford to own a car they could afford peak pricing.
My point is that millions of them already exist, with a distributed network of roads leading to them, as well as storage (garages). It would be costly to suddenly rip all those up.
I am not from U.S. but the experience I have had with using local air travel (with Southwest) in the U.S. I am prepared to caffine up and drive up to 400mi rather than bother with the hassles of flying. (I have done that a few times and found it quite enjoyable, maybe there was a novelty factor to it)
Having the right car helps: trips made in my almost-busted Honda Civic were much less enjoyable than the ones in my brand-new-custom-ordered Mini Cooper. :) The right soundtrack, the right weather, and the right caffeine vehicle are major factors as well.
A fleet would be able to handle these sorts of things better.
So far sharing economy companies don't want to vertically integrate their whole service stack down to physical goods. It requires capital raising, and is low margin compared to the value that they provide by scaling their main services. Maybe they will once they've achieved full market penetration and are struggling to increase their profit, but that's decades away IMO.
I suspect the typical case will be a drunk person throwing up in it on the way home. Hopefully they self-report; if they don't, it comes to the next rider to report it, who does and gets a generous reimbursement, charged to the credit card of the last rider.
Or, if everyone has a self-driving car of their own (or one that can be converted to self-driving), people will rent out their cars AirBnB-style when they aren't using them. I mean, why not? You've already got a garage, a driveway, etc. Might as well make a few extra bucks with your vehicle...