Yeah that approach can't be scaled to cities. Folks go there to chill or do alpinism, not live their lives and work. Otherwise those narrow steep streets would have very quickly rush hours and traffic jams, its really not a place designed for any traffic apart from walking.

One day, cheap automated electric self driving taxis will cover cities, thats unavoidable I think, but we are not there yet.

Cities are experimenting with traffic free areas like Barcelona's superblocks. You could imagine something like that but with cheap automated electric self driving taxis added. I agree we are not there - Waymo basically just substitute normal taxis.