A significant portion of taxi fares go to the driver, as opposed to the maintenance of cars. There are other marginal benefits such as making the driver's seat available, eliminating the driver's commute and as well as the risk of criminal driver behaviour, that probably offsets some of the drawbacks of having one fewer human being dealing with rare, complex non-driving situations such as a pregnant woman having to give birth in the car.

The economic benefit is significant to companies building self-driving cars, good enough to pursue if the tech is within reach. But to your point it's indeed much less of an improvement compared to various historical automation technologies that create >10x incremental efficiency gains.

Labor is becoming more expensive, even in the developed world. Eventually, people will want to do more productive things that drive a taxi for a little bit of money.

There is an argument for traffic optimization that will be possible when self driving taxis are common, but this is more of an argument also for the developing world where traffic is a much larger problem than the developed world (e.g. LA traffic is nothing compared to Beijing traffic).

I just look forward to a lifestyle in the states compared to the one I had back when I was living in China.