I think it's absurd that Google ever wanted to have a car that didn't have ANY manual controls. That's just a bad idea. I'm sure that most of the time, the computer will be a better driver than most people. BUT, there are going to be conditions from time to time, that the computer will not know what to do, and you will be stranded. We don't all live in sunny CA, where the roads are always clear. What happens in inclement weather? The car pulls over and tells you to wait for conditions to improve? Then you have to sit and wait, or even worse, you get swept away by rising floodwaters that you could have otherwise just drove away from? No person is perfect, and neither is any computer. Given how laggy my Android phones get after a year of use, I'd hate to see what would happen when my car gets confused...
Also, if there is a rear-end collision avoidance mechanism, people will be taking advantage of that. Few people go the speed limit, and if they're stuck behind a Google car on a two lane road going exactly 35, they're going to get mad. And once the first person realizes they can get it to pull over or accelerate by tailgating it, everyone is going to do that. I would certainly be tempted...

So the DMV wants "a licensed driver ... in the vehicle ... able to take control". How would a manufacturer make this happen? You can see it, of course: blind person gets his sister to buy him a car and park it in his drive. Are the neighbors going to call the cops when he gets in (by himself) and the car drives away?
I guess DMV will next require "operator detector" which can distinguish licensed from not and also alcohol, drugs, sleepiness, distraction, et al. And don't forget 'scoff-lawry'; we'll need a detector for that!

I am really curious as to how empty, autonomous vehicles will be identified, much less stopped by the various police/traffic agencies. If only 1% of traffic is autonomous, the volume of cars will be beyond police capacity to control. Factor in tinted windows, night riding and lifelike dummies plus a vast audience of semi-delinquent owners? Control will quickly get even worse especially if the systems work.

This is a really poor way to go about it...but then Google's "testing" has not been much of a test...far more of a publicity gimick.
Limited to roads under 35mph limited to speeds under 25mph, it doesn't begin to address the places where automated vehicles can really make a difference--and in which the operating environment is very different--highway driving.
It's far, far easier to automate multi-lane freeway driving than low speed neighborhood traffic. It's also several orders of magnitude more valuable to do so.
High speed road building is expensive--automation delays the need. High speed accidents cause most damage--automation reduces severity and numbers.
They ought to regulate it exactly as they do human drivers. Give the car the driving test...if it passes, give it a license. Too many violations and the manufacturer or owner needs to retest the vehicle. Insurance to spread the risk.
Assuming that an automated vehicle drives only as well as the average human (and they do much better!) automating our worst drivers would substantially benefit us.
If a car can pass the license exam, then it should be permitted a license. Equal rights for robots!

Haha, didn't even get off the ground, figures the lawyers still need to find the deepest pockets...

Desperate to regulate. A true California tradition.
As for the majority of drivers going faster than posted speed limits and the temptation to take advantage of rear end collision avoidance systems, those are just more reasons as to why we need autonomous cars now. People are the problem.
As for the idea that storms and inclement weather will cause huge problems, those factors already greatly affect human control. There are already several systems that have overcome these issues that have been posted here on Gizmag.
I do agree, however, that manual controls should be included, but I think the steering wheel can die. A joystick, even a gamepad would be more preferable for controlling these automated wonders in the event of failures. But there should be something in place that prevents drivers from taking control whenever because that's exactly how these vehicles will improve transportation and safety, is by removing humans from the equation. Such as the gentleman stating the majority of drivers speed and will be tempted to tailgate the cars to drive "their way", which causes accidents and traffic congestion.

To be successful the AC (Autonomous Cars) must have a secure architecture. Current cars put the various computers on the same buss. So critical command and control computers are on the same buss with to games or info and entertainment computers. Non critical computers must be isolated to the greatest extent possible from the critical computers! Black Hat has showen several times that today's C&C computers in regular cars can be hacked easily even in some cases remotely. The entertainment and games computers are particularly vulnerable.
DRM must be explicitly disallowed. Today DRM means that you do not own your car and the vendor can make arbitrary changes without notification or verification. Also independent examination and verification of software is explicitly prohibited. So long as DRM/Copyright is allowed ACs can never be truly safe.

All manufacturers including Google and also AARP need to fight the need for a licensed driver. Drone aircraft are permitted to use computers to fly missles over our heads that can kill thirty people at a time.
Computer technology can take over this task for seniors who can no longer safely drive but continue to do so as America lacks good public transportation and has killed trains that other smart countries use. The automated car also allows disabled persons the freedom they currently do not have. It's time for citizens in States who have home rule to put this on the ballot and overrule the DMV. Maybe it's time to make driving or autonomous cars a right and make the politicians do what we want for a change. We have a chance here to take a giant leap forward in technology. Just as the home use Tesla batteries are going to change this country we must encourage the autonomous car. Out of our way you paid off hacks in office. The people own this country and we are at a slow boil! All you have to do is look at the poll's for Trump and you had better wake up.

I could have 2 drinks for dinner and drive home from the restaurant!

Besides that, the DMV has to stall production long enough to figure out a way to make maximum profit from the new cars. We can't have a new type of vehicle being allowed for free if they can find a way to line their pockets for each one put on the road.