It doesn't look anything like a public bus. It looks like a sleek black monolith on wheels, with no markings or indications where it's going. Other private companies advertise themselves (Yahoo) or are more obviously what they are. But Google goes out of its way to make the whole affair look sinister.

It's true that it does use some corners in SF that are also used by public transportation. Those places are guaranteed not to be blocked by parking, and they are usually near subway stops and other public transport hubs. I don't know if they have a deal with the city to allow this, or if they even need one.