I would think for a self-driving car to reach an acceptable level, it should be like a train. If I get on a subway or a bus and it hits someone, I am not held responsible, even if it stopped specifically to pick me up first.

My biggest problem with this approach is humans are terrible at paying attention to things that don't demand 100% focus.

A car that drives itself 99% of the time, but fails catastrophically the other 1% is doomed to failure. The human operator won't be engaged enough to take over that 1%. At least not without airline levels of squawks and beeps and wheel shakers and even that might not be enough - airlines don't have to worry about children chasing balls into busy streets, etc. And the pilots are highly trained - drivers are not.