The idea is that with autonomous driving nobody needs to own a car and traffic jams are severely reduced because robots don’t drive like assholes (or at least by design shouldn’t...)
Not having to own a car to travel by car will of course increase driving, or being driven really. A situation where there is only self-driving cars is probably decades away at he minimum. And that doesn't really solve inherent throughput or speed issues.
Even if self-driving cars are 50% of the fleet, these cars drive better and can collectively work around traffic jams, so even human-driven cars benefit from automation.
Your visible marginal cost (i.e. mostly your fuel) may be low but the vast bulk of car costs are proportional to mileage--especially in areas where salt in various forms (winter roads, marine) isn't an issue.
It doesn't really matter if it's lower than the fixed costs, it matters whether it's lower than these hypothetical rented cars, and most likely, it is.
And mostly because they can drive when you're not in it. I'd be very curious to see city simulations where people just get off 200m from their job and wave their car goodbye as they can park somewhere else smoothly.