Tesla Cybercab has about three or four times the efficiency and like a fifth of the price by having smaller, two person vehicles. Indeed, the vast majority of trips are taken by single people and it's ridiculous to have a giant machine for them. It would also be okay to have a handful of larger, Model Y-sized vehicles for the multi-person trips.

To actually answer your question: Part of the reason why the Waymo cars are so big is because they got a deal on buying all the Jaguar I-Pace vehicles, which checked several boxes:

* Electric vehicles and hybrids are preferable for self driving cars as they have robust electrical power for the sensors and compute

* Larger minivans or SUVs are preferable for both development work and early scaling up where you can't afford to have both smaller and larger vehicles

* The I-Pace wasn't selling well so they managed to snag the whole production batch

* Though Jaguar isn't exactly known for their great reliability and electrical systems, the I-Pace, manufactured by Magna Steyr, is actually decent

The first two reasons are why the Chrysler Pacifica Hybrid, the only hybrid minivan sold in the US, was so popular for early self driving car efforts (including with Waymo) in the 2010s.

That said, Waymo's Ojai is somewhat more space efficient than the older I-Pace. They also have the Ioniq 5 coming.