The waymo carries no passengers when it's driving to pick up its next customer. So, its average occupancy (<1) is somehow even worse than that of a car used exclusively by one person.
This is incorrect, because you have used the wrong denominator. The average occupancy of a private car is approximately zero. Most of the time, it just sits there empty.
Again, this is not correct. Parked cars absolutely "participate in traffic" by making the other things in the city further apart and less convenient to reach without cars, and cars parked on the curb are taking up an entire lane of the street, which is half the street in many cases, or in some places like Manhattan the parking lanes are 2/3rds of the street.
the more people use it, the more likely there will be someone nearby to pick up next. and this issue is not exclusive to waymos, it applies to taxis in general.