In terms of hardware, autonomous vehicles use a number of external sensors and cameras that help them navigate the road safely, like the roof-mounted lidar dome Waymo developed in-house to keep costs down. The cars use this machine vision to see things like lane markings, as well as all the things one definitely does not want to drive into, such as other vehicles, guardrails, and pedestrian. Being on the outside of the car, these cameras and sensors can get gummed up by bugs, bird droppings and other debris. Waymo's lidar sensors, which give the car a 360-degree view of the world around it, are particularly susceptible to bird crap, so Waymo added the wipers seen here.
In real-world tests, like the one Waymo is conducting in Phoenix giving rides to the public, perception is also part of the equation. Riders need to feel safe in an autonomous vehicle. While the cars now have a human observer in the driver's seat, eventually they won't have a person riding along to keep the passengers comfortable. Waymo is developing a system that allows the car to communicate with riders, so it can tell them what it is doing and why. It will let them know that it's slowing down for an animal in the road, or waiting for the intersection to clear before making a turn. The mockup showed to Bloomberg also displayed nearby pedestrians, vehicles, and buildings to give passengers a sense that the car is aware of its surroundings.
As testing continues, we can expect more specialized software and hardware to make autonomous cars see, respond, and communicate better. As new, unexpected issues arise, companies like Waymo (and let's not forget major automakers) will continue to develop features that make the cars safer, making sure that the passengers know it.