Of course it can't scale. Putting 10000 cars with 1 human in them into a city is hard and just creates traffic. Putting 100 buses with 100 people in them is much easier.
Also why don't you use something what has less degrees of freedom like a train and thus is much easier to automate and also much easier to scale by just connecting more cars. You got that Loop thing, expand onto it and turn it into a subway...
Elon is trying to reinvent public transportation without a shred of understanding why did we get into current state - buses, subways, trams. There is natural development behind it, it is not like somebody said that city people shall only sit next to a stranger - you literally can't fit these cars in the city if you want to transport people to work and from work every day. There is no physical capacity for that. Unless you will use existing mass transportation solutions.
Also why don't you use something what has less degrees of freedom like a train and thus is much easier to automate and also much easier to scale by just connecting more cars. You got that Loop thing, expand onto it and turn it into a subway...
Elon is trying to reinvent public transportation without a shred of understanding why did we get into current state - buses, subways, trams. There is natural development behind it, it is not like somebody said that city people shall only sit next to a stranger - you literally can't fit these cars in the city if you want to transport people to work and from work every day. There is no physical capacity for that. Unless you will use existing mass transportation solutions.