Not just tiny cars, but scooters. I visited a friend in Beijing before the pandemic, and riding her scooter around town was the best way to travel. Cheap, faster than any alternative, and you can park it anywhere.
Slightly bigger than the scooter but you can have one passenger, more luggage, and you're protected from the weather.
Also there are handicapped people who can't ride a scooter but can ride a small car.