Personally, I think people vastly overstate the importance of being first to market. The first problem is that we would have to define what being being first to market even entails. Your points about the headwinds were spot on.

Is that L5 in suburbia during good weather?

How much better than humans do self driving cars need to be before they are legally allowed to operate without a human behind the wheel to handle disengagements? Does it need to be better than 50% of humans? 95%? 99%?

How much will legalization be slowed down once we have the first death from a self-driving car without an operator? What about the first time a death happens without an operator and sensor data demonstrates that the company that developed the car is at fault?

If several companies achieve L5 but those L5 vehicles aren't street legal until legislation is passed allowing them to operate without a backup driver, does that count as all those companies taking their L5 to market at the same time?

What happens if L5 cars in good weather are possible, but they aren't good enough in inclement weather? Few people are going default to a service that is 100% autonomous when they aren't reliable the moment the weather changes. What happens when it snows? What happens when you have flooding like in Texas this week?

Autonomous cars might be profitable in developed markets with strong currencies, but how much longer after will they take to become profitable in markets where labor is far cheaper?

Will the deflationary effects of automation in other sectors create enough unemployment and underemployment to drive the cost of labor down enough that it delays profitability with SDCs?

What infrastructure do you need in place to manage self-driving car fleets, keeping them clean and well maintained?

Without the actual presence of another person, the driver, how will we create implied presence that respects privacy and prevents vandalism and damage? What happens when some drunk vomits in an autonomous vehicle?

Google is ahead in SDC technology, but they don't manufacture vehicles. Uber is doing quite well as well, but also doesn't manufacture vehicles? How will manufacturing partnerships evolve to build out a fleet? How quickly will these manufacturers be able to retire a human fleet today with an autonomous fleet tomorrow?

Once there is no longer a driver, how will SDCs cope with other human drivers that are more likely to be aggressive, knowing that the SDCs will err on the side of caution?

Will market demand for private ownership be sufficiently valuable in terms of new car sales revenue, that those with SDC technology find it more valuable to just sell their SDCs on the open market instead of fleets manufactured and operated by the same TNC entity? I suspect Waymo will be first to market, but their requirement to partner with an auto manufacturer will lead them into a negotiation where the auto manufacturer will get to sell their vehicles to whomever they want on the open market. No car manufacturer in their right mind will allow Waymo to retain full control, since they'd be signing their own death sentence if they did so. If autonomous is existential for Uber, it's also existential for the auto manufacturers as well. The only way Waymo retains control is a buyout of one of the major car manufacturers and all the liabilities that entails such as dealerships and maintenance of cars still under warranty for a decade or longer.

How will two SDCs from different manufacturers deal with one another in ambiguous situations?

What will the role of patents play in this market? An L5 car is likely going to require so many patents that each of the top major players in the SDC space will own essential patents, making cross licensing unavoidable. Uber will end up licensing from Waymo and Waymo will end up licensing from Uber.

From an L5 safety perspective, every car on the road, human-operated or autonomous is a liability. This means that every SDC manufacturer has a vested interested in supporting their competition in being safer. If Uber helps make Waymo vehicles safer, they also increase the safety for their own customers. The same applies to Waymo helping Uber vehicles become safer.

Basically, there are so many things that can and will go wrong to slow down the adoption of SDCs and make adoption geographically uneven, that I suspect that it's going to be a sufficiently gradual change that being first to market is going to be relatively unimportant. SDCs are evolutionary, not revolutionary, thus the incumbent will greatly be favored. The cost savings of gradual SDC adoption will be spread across all rides as quickly as it makes economic sense, but no quicker. Whoever has the strongest relationship with the most riders will win out in the end.

For people to give up car ownership, transportation needs to function with the reliability and confidence of a utility like gas/water/electricity. We're going to have a hybrid models for years before fleets become entirely autonomous. Four nines of reliability is non-trivial and that's what you need to be a utility. L5 only satisfies some of the requirements necessary for a four nines transportation service.

SDCs will be on our roads far sooner than the naysayers predict, but they will take much longer to replace humans than those bullish on SDCs predict.

That all said, if I were a betting man, I'd say Uber will almost certainly be "second to market", whatever your definition of "to market" is. Why? It's ultimately going to come down to a race for data and Waymo and Uber are going to do much better than the rest of the industry in terms of data collection and best in class infrastructure to crunch and manage all the data collected and to run simulations. Like Apple, Google and Amazon, software companies will have an easier time becoming hardware companies, than the hardware companies will become software companies.

Lastly, I may be totally wrong about everything above. If someone has contrasting viewpoints about how the general transportation market could switch to SDCs suddenly instead of gradually, I'm all ears.