I have many friends who buy cars from the $500-$1000 range and then drive them for a few years, fixing everything themselves using replacement parts. The cars are usually 15-20 years old. The insurance is $100-$200 a year. If they drive daily,do you think anyone will rent them a brand new, technology packed car for what is effectively $20 a month? HN lives in this bubble when everyone can afford a new car, or at least a lease on a car, but if you move slightly out of the 1st world countries(and by that I mean good countries with free healthcare, free education, but still with developing economies), you will find that for a lot of people $200 is half of their monthly salary. And yet those people drive their cars too. They don't live in poverty by any means, it's just that the standard of living is different than in the West.

>do you think anyone will rent them a brand new, technology packed car for what is effectively $20 a month?

Self driving cars won't always be new though. The price of the technology will drop rapidly as they become mass produced. And there will always an economic advantage to renting vs owning. The cost of the car is effectively divided over several people instead of one.

Except it will never be cheaper than public transportation. If public transportation is available, they will take public transportation. If public transportation is not available, neither will be driverless taxis.

That could be true... assuming that the government is able to adopt innovations and cost saving measures across all of their public transit systems fast enough to keep up with price drops from private industry.

I suspect that will not be the case. While public transportation may catch up on price (if the political will exists to push it there), I do think there will be a period of time where hailing a self driving car will be cheaper than some or most public transit options.

Will there be a difference between a self driving 1-5 person machine and a self driving 5-1000 person machine?

A robotaxi can take you to the local robobus hub, which drives you to the local robotrain point, whereupon a Just In Time (un)scheduled train will leave, as all journeys can be coordinated.

I can't imagine that there won't be strong efforts made by any entrants into the individual autocar market not to hinder the penetration of new public transit systems, and to hobble existing systems.

Why not? If driverless taxis are cheap enough, even a small town or rural area could have some. Wheras public transportation is available only in very large cities.