California DMV approves map increase in Waymo driverless operations

The effectiveness with which AVs have been able to test and spread despite local municipalities being fairly luddite about them does provide positive evidence for the idea that states are the right level of government for many of these decisions. If this had been entirely up to Bay Area municipalities it would have been infeasible, and this outcome and the lives consequently saved will be due to state-level decision-makers being able to make better decisions than local municipal decision-makers.

If the urban sprawl of the Bay Area were (correctly, in my opinion) represented as a single fused city-county like Tokyo, I think we would have better governance, but highly fragmented municipalities means we have a lot of free-rider vetos.

I don't see any reason that individual Bay Area cities cannot pass laws against Waymo operating there. Why they would do so is a different matter. I'm hopeful though.

Municipalities are generally preempted from regulating matters of statewide concern. In CA, the state decided to have the CA DMV regulate operational safety and the CPUC regulate the commercial service. Individual cities are prevented from enacting local laws that encroach upon state authority.