I strongly agree with Carol's suggestion. This is what worked in our case. For example, the only person who could convince my father he needed to stop driving was a respected brother-in-law ( who is a retired physician). My father has retained great respect for all of his old friends, friends who go way back. This is a terrific suggestion by Carol. You could talk to one of your mother-in-law's old friends and explain to her the situation. Often friends of friends can have an objective vewpoint; they only want the best for their elderly friend, so they may be able to support you in nudging your MIL toward a smaller place.
See if there is someone outside of the family that the father trusts. Often people who aren't part of the family can convince them when family can't. Even a financial advisor, doctor or faith community leader - and old friend - these folks can sometimes have influence. Carol
Carol