I think self-driving cars will reduce congestion in two ways. On freeways, due to slow human reaction times, there is a 2 car-length space between cars, meaning cars only take up about a third of the space on the freeway.  With self-driving cars, there is near instant reaction time, so the space between cars will be 2 feet.  With that, you basically triple the amount of cars on the freeway, reducing congestion by two-thirds.<p>In addition to this, on surface streets, traffic lights meter traffic through intersections.  With self-driving cars, the cars will be able to go through intersections without the need for a traffic light, eliminating that metering effect.