One of Google's self-driving cars.
Courtesy: Google
By Doron Levin
May 28, 2014

FORTUNE — Google pushed the commercialization of self-driving cars a giant step forward by announcing it is building a prototype vehicle – without steering wheel, brakes, or an accelerator – and will demonstrate it within a year.

The company aims to prove that the means are within reach to allow passengers to travel safely to their destination in a self-driving vehicle – albeit at a speed not exceeding 25 miles per hour. Occupants will have no other role in the vehicle’s operation beyond stating their destination.

Chris Urmson, director of the project, hailed driverless technology’s potential “to alleviate pain and to have a broad societal impact” by reducing the number of accidents, deaths, and injuries from accidents. He cited the roughly 32,000 automotive fatalities annually in the U.S. and 1.2 million worldwide. Another motivation for developing the technology, he said, during a phone press conference Wednesday morning, was to provide mobility to the elderly and disabled.

Auto industry executives have speculated about Google’s business strategy for self-driving technology, which it has been developing since 2009 and demonstrating on specially adapted Toyota (TM) and Lexus vehicles. Though known mostly for Internet search and advertising, Google researchers have discussed the project with global automakers, raising the possibility that it was shooting for an alliance or collaboration.

Some have questioned Google’s (GOOG) ability to mass manufacturer vehicles. Then again, Tesla (TSLA) had no history of building cars and it turned itself into a manufacturer in short order.

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The drawing of Google’s prototype suggests a small urban runabout that looks nothing like a conventional car. The exterior will be soft, to protect pedestrians or bicyclists that might bump into it.

Urmson didn’t rule out that Google might join forces with another automaker. Yet the company’s decision to create its own vehicle could influence, affect, and perhaps accelerate the thinking and plans of auto industry executives and engineers. Until now, global automakers have thought in terms of incremental steps, such as adaptive cruise control and automatic braking that aid drivers and provide backup systems, without assuming complete control.

Mainstream automakers often refer to high-tech sensors and features, already available on many premium models, as providing “co-piloting.” A few auto companies have kept an eye on the rapid development of software and artificial intelligence that arguably can drive a car more safely than a human and have announced plans to offer a driverless car. Carlos Ghosn, chief executive officer of Renault and Nissan, has targeted 2020 for introduction of a driverless model. Volvo has demonstrated a car that can self-park, without a driver, to journalists; it will be available in 2017, the company says.

As digital technology proliferates, automakers are understandably reluctant to relinquish control of their vehicles’ “brains” to Google or any third-party. The most far-sighted thinkers are beginning to imagine the car as a platform for e-commerce, where drivers might receive discounts and other offers as they approach a Wal-Mart (WMT) or a McDonald’s (MCD). If Google is right, that motorists no longer need to drive, cars may wind up carrying no occupants at times and could ride empty, picking up travelers or delivering merchandise as needed.

For many, the thought of traveling in a car that drives itself may seem improbable, if not horrifying. But Google already has logged hundreds of thousands of accident-free test miles. Others have as well. The auto industry, particularly its newest members, is proving that highly advanced vehicles will possess abilities once only described as science fiction.

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