Cities seem to me like the worst place for automated driving. They're not great for any driving, since things are constantly coming at you from all directions. And while computers are great at operating with many simultaneous distractions, these are cases where errors get people hurt or dead. Erring on the side of caution will block traffic, and city streets are often already at capacity.
I would think that the best use for automated cars would be interstates, which have limited access and more predictable situations. Problems turn into crises fast, but that's the kind of thing where a computer could react better than a human, since it's likely to involve less fine discrimination between "human" and "non-human".
Ultimately I'd love to see automation replace all human drivers in cities, since it can break the connection between driver, destination, and necessity to park. They could coordinate more effectively at intersections, which are currently very wasteful. So I'd like to see this work, but right now it feels like begging for trouble.