How exactly will it reduce congestion? The cars are the same size. The trips are the same and are likely to go up in frequency with self-driving. The roads are the same as before. If anything you will have a ton more congestion. The vast majority of congestion is due to not enough capacity and too much demand. Right now that is caped due to the time you waste driving but if it's self-driving then the sky is the limit.
Public transportation increases the potential commuter density per area of road/rail while self-driving doesn't.
I think self driving and public transport are actually complimentary. The principal benefits of owning your own automobile are convenience, as it’s always available for your use, and range— it will go wherever you want. Enabling vast fleets of on demand taxis is already well underway, making owning your own vehicle less attractive. The next step imho is bundling rides together, making NOT owning your car cheaper still. For urban cores, I would expect shared self driving to crowd out private cars pretty quickly.
I will always argue that self-driving will increase congestions. There are so many behaviours that are on individual level superior, but on large scale worse. Send car to park somewhere cheaper doubling the number of trips. Have it circle around waiting to pick you up... And as felt cost of just sitting in car goes down, time spend in car can go up.
It will probably nearly eliminate individual car ownership which will free up a ton of real estate currently used for parking. Which will probably reduce congestion inside the cities. It may also reduce highway congestion because we can engineer it such that it knows how drive unlike most people on the roads today
