Traffic is usually caused by adding inefficiencies across a system with little slack - someone brakes too hard or too early, and if all the cars are stacked up, that one brake event can ripple through hundreds of following cars, getting worse and worse because each person brakes more. Self driving cars can perfectly sync up and move like a train. Theoretically there could be no traffic on highways if all cars are self-driving. Rarely is a highway so full that there couldn’t be more cars (eg. The entrance ramps are backed up) which implies the issues are related to the driving flow and not the capacity of the street itself.

Same reason there's less gridlock when people obey traffic lights and other rules of the road and don't brake randomly. If every car on the road drove itself then there would never be traffic.