They've been at it since (long) before google even existed and have had self driving cars for nearly two decades. The thing that needs to be done is to expand the conditions under which it works and to improve the reliability because an intervention is a lot worse than having to do an evasive maneuver when you're already driving.

http://en.wikipedia.org/wiki/VaMP

The reliability thing is the big issue though. It should be possible to scale that transputer system down to the equivalent of a couple of smartphones by now, but the luxury brand car manufacturers are still very reluctant to add anything automatic to their autos. For about 3 years they're parking automatically, and for a year or so they follow the current track on the road, yay. That's far from what they did in 1996.

Having that test strip will help sort out the issues, increase confidence and through that, increase political will to sort out liability issues and so on.

Even Mercedes is now promoting autonomous vehicles with "you may have better things to do on the road" (at CES, I think). That was completely unheard of even two years ago (where they pretty much dismissing the Google effort because it spoils the "fun of driving" and who would want that?)

So yes, Google plays a big part in that current effort by pushing these companies to do what they're able to. Just like Tesla makes everyone else consider electrical cars now, even though there were concepts of that going back to the early 90s (and mass produced electrical cars in the early 20th century).

Both demonstrate that the time is right, and now the others want to be part of that, without becoming reliant on those new-comers. Markets at work.

I think it's also about leverage. If they do end up using Google's tech they'd get a better deal if they're in a less desperate position.

From German pride (which is cars and soccer) over privacy concern to plain industry support (expect Germany to support those compan... I meant to say, efforts with €€€), there are many incentives to not go with anything Google, except maybe as supporting system (eg. their maps data, together with others).