The value proposition here is basically replacing cab drivers.

This offers some really interesting challenges because there should be some sort of optimal routing algorithms that would allow a car to carry more than one passenger at a time.

I am sure Google is already working on something amazing in this regard.

The most exciting thing is the potential to radically reduce transportation costs. The cost reduction won't be an order of magnitude but it would probably be at least half the total cost of transportation we incur now.