Driverless vehicles and pedestrians don't mix. So how do we re-arrange our cities?

Videos showing autonomous or self-driving vehicles weaving in and out of crossroads at speed without colliding suggest this technology will solve traffic problems. You almost never see pedestrians or cyclists in these videos. The reality is that they don't fit. The vision of autonomous traffic is either of a large convoy of vehicles just a metre apart moving along road corridors at 100km/h, or of vehicles in an urban setting where their sensors are picking up every pedestrian movement and slowing or stopping. In the first case, the vehicles form an impenetrable barrier to pedestrians or cyclists (who, like on a freeway, will probably be banned).