I think they were more implying that the software that makes the decisions should be common to all of them. That way we don't allow individual car manufacturers to make potentially fatal mistakes when cutting corners with their software development. I think at the very least there should be a standardisation, so that there can be some communication between cars to aid in resolving traffic jams and other uses.
Then you will have people writing software with the aim of pass the tests, not real world safety. I don't think auto testing can catch the type of bugs that can arise sporadically, which could be fatal in the case of self driving cars.
The industry isn't going to just hand Google a monopoly. Of course they are going to develop their own as well.
Even if Google's software was the absolute bees knees, what if Google deprioritized it? Left the industry? Made unreasonable licensing demands, or made exclusivity deals with competitor automotive manufactures? What if they used it as leverage to push manufactures around?
Even if you do decide to work with Google for now, not having a backup plan is just poor strategic planning. Having a backup plan means developing these sort of systems yourself.
All I'm saying is that I trust Google to produce this software to a high standard, much much more than I trust the auto manufacturers to do so. I'm sure Google isn't developing their own brake pads in these cars, and I wouldn't trust those brake pads if they were.