The first step in the process is navigation, something that requires a little more than the Google Maps Navigation functionality on display in Android. (That automated system isn’t perfect – it tells me to go the wrong way down a one-way street to get to my house, for example.) Before a Google autonomous car goes anywhere, the route is manually mapped out by a separate human driver, noting any changes in road conditions, obstacles or markers. Once the route is set, a safety driver and software engineer load up into one of the automated cars.

Once the passengers are set, the car loads up information created by one of Google’s massive data processing centers into the local computer. The remote computers map the route and the local computer continually processes data from the car’s sensors, including a standard GPS sensor, a powerful laser array for “seeing” obstacles, and small radar arrays mounted around the side of the vehicle.

Source, http://www.slashgear.com/back-to-basics-how-googles-driverless-car-stays-on-the-road-09227396/