What AV addresses is primarily a last-mile problem. Last mile is all about the personal transport solution, and cars are just the largest of those. The physics and geometry of cars means that they are more expensive because they are literally more mass being moved around. Bikes and scooters have become much better personal transport recently because they now have electric assist options, and so are more accessible for more situations and capable of pulling heavy loads. So the problems of cars are already being addressed from one end; bike-friendly infrastructure is lagging behind in much of the world, but it's also one of the cheapest changes you can make to a road, and far cheaper than adding a new metro stop.
Once AV is adopted, the physical economics remain the same, but the economics of rental change; you don't have to go where the fleet is, it shows up at the door. But that doesn't result in everyone riding a personal limo. Smaller is cheaper for personal transport in the last mile, and that does not change just because you replaced the driver. Cost reduction will take place in shared rental fleets. Cost reduction means cars get smaller, so car infrastructure can get smaller, so last-mile alternatives gain space, so transit gains space and ridership. AV is not in conflict with transit, rather, it redefines the bottlenecks of transit modalities. If you need a sit-down vehicle with a cabin for your trip, you still don't need additional empty seats - unless you pay a premium, you will be crammed into the lightest, smallest thing that is roadworthy. Only an enthusiast will bother with lugging a huge vehicle around town if you can rent that size on demand. That goes for the car and it goes for the train. You still want to have transit to cover longer distances along major corridors, but the effective coverage of all stops is bolstered if you can pick up a bike or scooter share at either end of the trip.