I think sprawl will increase when self driving cars become a thing. Long commutes will be a lot more tolerable, parking a non issue, and the cost of owning a car could be reduced with self driving taxis or busses.
The reason a lot of people (especially young people) have been flocking to walkable cities has a lot more to do with self-identity and lifestyle choices than with just merely commuting time. No self-driving card will change that.
Keep in mind that the opposite is also true. Self-driving cars make city-living (where owning a car is unaffordable and unpractical) much easier, since it increases the access to cars.
These are drivers to be sure, but the biggest is the network effects of being in a denser metro. The more people there are in a given area, the more human resources: job options, entertainment options, dating options, knowledge-sharing (the form that can only be done via meeting people in person), collaboration, and other forms are human and knowledge-derived capital. It's easier to form a rock band or hire for a startup idea in NYC than it is Duluth, Minnesota where there are fewer musicians and programmers.
This is why rural areas, unless undergoing some sort of unique boom (e.g. the Bakken Formation or Athabascan Oil Sands) or hosting a college/university, sustain much older average populations. Unless one's career allows them to live/work remotely, it's often necessary to move to the city to pursue most career options.
Aside from the self-identity and lifestyle points you mention.
For me personally having a self driving car would make suburban living much more attractive. For a lot of people having a yard/garage/space to tinker is a really big selling point.
There is a big difference between having to spend an hour driving yourself and having an hour of freeish time to read/watch netflix/do work. I think the other big factor is being able to go out for drinks. Living in the suburbs today means either insane cab bills, having to organize a dd or driving drunk.
And yes young people might prefer to live in denser cities. But when they grow older and have a family, they prefer to move out into a town or suburb.
And beyond that, it's just economics. Cities are expensive. They are inefficient economically. Rent is high, they have higher taxes, and the cost of goods is higher. If you could live outside the city, and conveniently travel there whenever you need to, you could save a huge amount of money.
Cities are also more productive.
But: cities are financed wrong in most countries. They could easily finance themselves from land value taxes.
Getting quality work done is tough if you're at all prone to motion sickness while working on a computer in a moving vehicle, and it's hard to get in quality sleep even in a fully reclining seat.
My wife and I commuted together (45 - 60 minutes) for almost a year and while I could get some work done while she drove, it was not nearly the same as when I'm working from home. Likewise, sleep was not an option, the timing wasn't right (it's hard to wake up, get ready for work, then catch a short on the way to work).
While parking may be less of an issue if your car can go park itself, traffic will become a much bigger issue because all of those cars driving around looking for parking (or another passenger) after dropping off their passengers are going to double downtown congestion (i.e. instead of you driving to your parking garage and leaving your car there, your car is going to stay on the roads until it finds a place to park, perhaps outside of the city)
If I could get a self-driving car that worked competently, it would certainly make my commute so much more tolerable.
Do you really get enough benefit to living 1+ hour from work to make it worth spending 500+ hours in a car (~60 8 hour days)?
Now, I love my job, because the work I have is challenging and a lot of fun. And I love where I live, I have an amazing view and I have no backyard neighbors, it goes off into acres of wilderness, and that's hard to come by in the Bay Area.
I just hate the commute. Being wealthy enough to uber to work everyday would make things perfect, but since I'm not that rich, a self-driving car would come close.
Parking as a non-issue is an argument for denser and tighter organization of cities instead of sprawl.
Self-driving taxis and buses are another reason to prefer living in the city, least of all because they are cheaper in a denser area.
Why is all this tech being used to solve the goal of self-driving cars, and yet remote work is still somehow in the realm of fantasy to most people?
But not all jobs are like programmer's. Think of e.g. medical personnel, overworked as they usually are, being able to sleep for an extra hour while being taken to / from a hospital. Think of a teacher who could spend an hour of commute preparing to the lessons instead of holding the steering wheel. Think of a plumber who can settle some business affairs while on the road, and spend an extra hour with his kids instead.
Caltrain and Amtrak provide A+ reading experience. Even MTA or PATH are bearable. I rate them a B- if your book is one-handed.
Then there will be political fights over city congestion taxes and other ways of extracting money from people who do that.
Interesting times...
I imagine that far less people will own cars and instead there will be a fleet of self driving taxis.
But I'm not sure, interesting times - like you said.
If you move further out of the city, you have much cheaper rent and taxes. Saving that much money would make it totally worth it to spend a few hours in a car everyday.
In large metropolitan areas most people will end up spending what they can afford on housing, the choice is just between a 1h commute and large back yard and forest/beach within walking distance, versus the city with short commutes and shops/services within walking distance.
You could live in a small flat in suburbia and save a ton, but it doesn't appear to be a popular choice.
Many companies still don't embrace full-time telecommuting (including tech companies like Apple and Google that have unlimited technology resources to make it work), so it's going to take a big paradigm shift for those companies to accept that workers driving in are actually "working" before they get to the office.
My company doesn't offer shuttle buses, but of the people I do know that ride tech shuttles, while they do tend to work on the shuttle, it's usually just catching up on emails before they get to the office to do the "real work", and 2 hours on the bus is not equivalent to 2 hours in the office.
And techie work is mostly laptop work anyway, the bus is like the proverbial coffee shop.
In my previous job, taking the train was a longer journey door to door (40 minutes compared to about 25, or 18 minutes once when I wanted to see how fast I could do it and didn't care about jumping the grass embankment to get off the motorway at the motorway service station). I probably took the train about two-thirds of the time, and drove the remainder. Had that job for about four years.
I am but one data point, but I see a lot of other people on the train doing the same thing.
Why care about commuting times if commuting isn't as necessary in the first place?
Self driving cars may make travelling easier, but even then you've got to get somewhere. Even then the inside of a car is a less useful working environment than an office, so short commutes would be preferred.