> what in particular is to stop Cab Company X from saturating the roads with cabs in a brute force attempt to capture a higher proportion of the ridership
They can, but so what? The sheer number of cabs it would take to 'saturate the roads' means enormous amount of upfront capital. But that also means cheap prices (essentially 0 profitability) - and isn't that what we want?
Leaving that aside, if the roads get clogged to the extent that service is compromised, people will do what they do today, and that is, rely on mass public transit (LIKE THEY DO TODAY). If I'm in New York or Hong Kong, sometimes I'd rather take the subway than have my taxi or uber fight traffic.
There are no issues here.
>while I go in to shop at this store, my car circles the block for the next hour waiting for me)
I heard that argued before, and I say this: never going to happen. That's a pipe dream of driverless car aficionados.
Your car is never going to be able to compete with a fleet because the base operating cost of a driverless taxi is going to be fuel cost + maintenance and fleets will always be able to underprice you due to economies of scale. In essence, if you rent out your car, you will lose money because you will, at the very least, have to contend with the wear and tear.
But even if you just want the car to 'wait' by circling the block (instead of 'working' while it waits for you) ... it's not cheap to have the car circle the block for an hour. 1 hour of driving is going to cost you in fuel. It's going to put wear and tear on your car. You'll risk collision and traffic tickets. It may not be worth it to do that all the time. HAVING SAID THAT, once in a while, maybe you want to take that hit, and isn't it nice to have the option to do that? Maybe you're running late for your flight, and you want to quickly run in to the store to pick something up - take the hit and the risk.
There is no free lunch but options are good.