Yes you're absolutely correct - I guess my main question is could the space savings, like the pollution savings, be 'good enough' for it not to matter in practice, assuming that driverless cars become the 80% usecase for road traffic and today's 'massive 5 seater car for an average of 2 people' model goes away.

It's also important to point out that of course, buses and trains shouldn't go away - they could indeed also have a bunch of problems solved by being self driving too, most notably the 24/7 running thing - they'd just be another option in the mix.