Small cities can support mass transit. Street cars and buses can do an excellent job when you don't have the scale for a subway system. Yes neighborhoods should contain every need, but when you plan neighborhoods to revolve around cars, then there's less space for those needs. If people can't safely and comfortably walk from their home to a place of business, then they'll either take mass transit, or they'll drive. If they drive, then there needs to be more road and parking space to support them. And it starts becoming an unsustainable rat-race where everything ends up spread out with a bunch of pavement in-between, and you can only get places if you have a car.
Remove the idea of "car" and think of auto-driven cubes with their own pathways within a city. Similar to subways, but can be above ground with covering. You don't need parking, streets, traffic signals, and a whole host of infrastructure is eradicated.
You go by behavior:
- I need to go to library, store (walk or bike)
- I need to go a business or house (cube it)
- I need to leave the city for long-distance travel (now we connect to mass-transit)