Correct, hence the competition assumption. City managers will need to be wary of any long-term deals offered by taxi companies in the coming years. Or buy yourself a taxi company now!
Keeping current margins would mean 1000% profit margins since the actual cost of ownership is surprisingly low. The cabby's cut, down time, and the medallion's costs (both up front and in supply restriction) make up the vast majority of fare today.
One company keeps the profit. The next one undercuts the hefty margin to steal customers. The first lowers prices to be competitive.
I mean, something like five+ companies are working on some level of autonomous cars. It's not like we're looking at a future monopoly on the production of them.
The Federal government absolutely would not mandate a monopoly over the country for safety concerns. The vehicles are already licensed on a per-state basis and it stands to reason that states or cities, who already regulate taxis, would extend that power to autonomous taxis.
Which means, if SF gives a monopoly to Google, then LA might give one to Mercedes, while NYC gives one to Ford. (Or whatever). The point being, there is still competition overall to win the business of municipalities.
That's the same argument that allows Comcast to be the only ISP in my area. There's no competition within my area that allows me to make a conscious decision to reject a company.
If my municipality is making the decision, then there is a politician who can be bribed into keeping that utility into place. Really, a terribly system.
