Good question. I don't believe it is fundamentally bad but in the context of an economy and society where personal advancement and prosperity are strongly connected to employment it doesn't help. There may be other ways such as universal income but I still can't get my head around how that is sustainable.
In Australia we are teetering into our first recession in decades. Retail spending is down, property values are going backwards and increased defaults put the stability of the financial system at risk. Wages growth has stagnated, work has become casualised and the only people getting richer are those who were rich to begin with. In that context having public funds go towards technology instead of giving someone an income seems wrong. The people who made the self driving bus aren't spending at local shops like a driver would.
California may not have the same economic pressures but I would be surprised if people aren't asking some of the same questions. There is a massive number of people employed operating vehicles. They feed families and contribute to local economies. What happens when they lose their jobs?