Reuters' source for the story was John Absmeier, the director of Delphi Labs in Mountain View. Absmeier was riding in his company's test car when the close encounter with the Google car occurred. Reuters quotes Absmeier as saying the Delphi car "took appropriate action," and the cars did not actually collide.
While it's true that Delphi and Google are competing to develop self-driving technology, Absmeier would have no reason to embellish this story to make his own company look better. Both cars are collecting scads of driving data, which could easily be consulted if there were any question. Also, Google just started issuing monthly reports on incidents involving its self-driving cars. According to Reuters, Google declined to comment on Absmeier's story.
Why this matters: Google's self-driving car project will go on, but with a small dent to its dignity. This news has emerged a scant day after Google proudly announced the debut of its latest self-driving car--the cute little bug-shaped car, not one of the retrofitted Lexus cars--on Mountain View streets. Google's publicity photo for that car showed it driving on what appears to be the same street, San Antonio Road, where the Google-Delphi dust-up took place. If nothing else, it sounds like everyone should drive extra-carefully around there.