https://www.youtube.com/watch?v=iSasPVYzSQ0&t=150
It's a fancy cruise control, not self-driving. It doesn't understand anything but how to follow lanes (sorta, it doesn't work everywhere) and it has some ability to recognize obstructions in front of it and stop (again, sorta).
Google is teaching their car how to navigate city streets, deal with human drivers and pedestrians, navigate intersections, handle construction zones, deal with emergency vehicles and cops directing traffic, etc. All with a much better sensor package than in a Tesla Model S. Their system doesn't even need lane markings on the road, as they compare LIDAR data with a pre-marked reference map. Tesla's system, and every other system that doesn't do this, breaks down when lane markings are faded or non-existent.
Google's system would not have been prone to this type of accident five years ago, much less today.