Driverless private cars (which the article is about) and driverless taxis aren’t the same thing. The former does nothing to solve the traffic density or vehicle size problem. Even focusing on driverless taxis, Uber and Lyft have offered for some time options for nicer cars, larger cars, and nicer larger cars, so presumably there’s a market for taxis to still be a status symbol, unlike you state. Finally, your economic incentives have nothing to do with driverless cars; it’s just a tax or toll on non-pooled taxi rides—that could be implemented right now.
And, in the end, even a full car is still less dense than a bus or train.
The uber/lyft/limo large cars vs standard cabs/cars are usually used for a trip when there are more passengers or cargo. With private cars, the larger ones are bought when there might ever be a trip with more passengers or cargo, even if 99% of the time they just have a single occupant.
Also normal cars spend most of their time parked. Driverless taxis wouldn't need to.
And, in the end, even a full car is still less dense than a bus or train.