Small vehicles are perfectly safe on the road with other small vehicles.
The problem is that everyone is driving giant SUVs, myself included.
The government should get the fuck out of the way entirely. Tiny cars would take over as daily drivers. You can easily design a car that will drive coast to coast on a single tank of gas, get 100 mpg, and do 0-60 in 6 seconds. You could still do close to that even with airbags and all of the other safety garbage the government mandates.