This is an interesting article as an indicator that Toyota thinks self driving cars are that critical. Perhaps it was in response to GM's messaging along the same lines.

Consider the overall effectiveness vs engineering effort compared to say 'smarter mass transit'. Imagine how useful it would be to have a mass transit system which took advantage of the extreme efficiency of rolling on rails, with vehicle based switching system [1]. We don't do that today because a) trains can't change lanes if something bad is going to happen, and b) the system is optimized for large trains going on the same route.

But autonomously driving a train is a much easier problem than autonomously driving a car. And if you created a system where vehicles could self-select to enter a station then you could create mass transit with 'call on demand' vehicles which only stopped at the pickup and drop off stations. This eliminates the scheduling friction which has empty trains running at 2AM and overly full trains running at 5PM.

Building a system like that is well within our current engineering capabilities, would save energy (these things are electric not gas powered) and achieve high ridership by being very nearly as convenient as a car without the hassle of driving in traffic.

[1] Traditional rail switches use arms on the ground to configure a rail switch to move a car on to one track or another, in a vehicle based system the vehicle configures its wheels to take one path or the other, this allows the track to be 'passive' and not need a central switching authority.