Facebook was started by one college kid 4 years prior. Waymo has had the resources of one of the largest companies in the world for the last 10 years.
Las Vegas (Aptiv), Pittsburgh (Aptiv, Aurora, Ford, Uber ATG), Dearborn MI (Ford), Miami (Ford), Washington (Ford). There's also a retirement community in Florida that Voyage is testing in.
Flagstaff, AZ (pop. ~70,000, and double that in the metro area) has colder average lows than NYC during the winter, and several times more snow.
It's the closest major(-ish) town to the Grand Canyon, which is about 75 miles away.
Self driving cars is indeed a cool technical problem to solve if you asked an engineer, but if you asked society what it needed I doubt self driving cars would be the answer.