My understanding is that Waymo is doing option one in Pheonix right now.
There is no business model. Uber doesn’t have anything unique, least of all self-driving tech. There won’t be any sort of sticky network effect since consumers can simply switch to a different ride hailing app with the lowest price. When (if?) AVs become reality, the car manufacturers themselves can become their own Ubers or AV-subscription service with no need for a middle man.
One way the market could be more competitive is if there was some sort of protocol for ridesharing where you could access drivers from all the different services on a central platform. Then the services would have to compete to see who can offer the best prices and the best availability at certain times/locations. It would give room for new services to pop up because the transition between using Uber and whatever new service would be seamless. Or rather, there wouldn't really be a transition at all. Today I use Uber, tomorrow I use Lyft, the next day I use whatever, just based on what ride is closest/cheapest at the moment I want to use the app.
If AVs become a reality, cost and therefore the pricing for the consumer appears to be the only thing that will matter for the success of the app.
