While I do agree that smog reduction is a legitimate and major plus, the point about profitability is weird. Are highways profitable? If yes due to increased economic activity, then I can make the same argument for other infrastructure. It’s not about profitability, it’s about political will.
Self-driving taxis might work if city run, but if privately run it’s going to be Uber all over again, where they come into the market cheaply to kill competition and then spike the price as high as it can go. That would kill any incentive to use the service rather than own your own, for those that can afford it.
With full self driving, there’s still major legal hurdles involved. If a self-driving car kills someone, who’s to blame? The driver not driving? The programmers? The company? It’s a serious issue that I think will kill the whole concept.