They did some driving in some Arizona suburbs too, iirc. The reasoning for having so much driving in SF is twofold

1. Silicon Valley, both for the workers and the general public's willingness to embrace fancy new tech 2. SF is DIFFICULT to drive in. If you follow all driving laws & drive super defensively, you'll never get anywhere on time. If an AI can learn to effectively navigate around traffic, construction, stopped rideshare and foodshare cars, large crowds, etc etc, it can drive anywhere.

SF also gets a lot of rain and dense fog, good for testing low-visibility conditions