On-demand helps with mass transit because it solves the last-mile problem. On-demand self-driving cars are cheaper to use than on-demand with a paid driver, so

On-demand helps with mass transit because it solves the last-mile problem. On-demand self-driving cars are cheaper to use than on-demand with a paid driver, so more people will use them, which cuts the total number of cars needed. As you say, that means less energy expended on building cars. It also means less energy for road construction and maintenance, and less city parking. Less city parking means more density, which cuts transportation costs. I forgot to say in my OP that the new pattern would also include extensive car pooling, which on-demand makes possible and I am guessing that self-driving makes somewhat easier.