I think your friend is, at best, misguided. Tens of thousands of drivers die in their cars every year. The statistics I've seen suggest you're no more likely to be involved in a fatal accident on your bike than your friend is in their car. The distances and speeds most car driver travel at puts them at greater risk. Even the scenario of getting side-swiped on an arterial road is unlikely to be fatal. I've had close calls, but the difference in speed was minor and I generally just rap my knuckles on their fender to get their attention (try doing that from your car).

In my opinion, the bigger issue here is the #1 killer in the U.S. - heart disease. Does your friend exercise regularly. Do they realize that, by commuting by bike on a regular basis, you are drastically reducing your risk of heart disease? The long-term benefits of cycling far outweigh any increased short-term risks. Of course, there's also the environmental considerations but it sounds like your friend is incapable of any sort of self-sacrifice for the greater good.