There are dollar vans in NY, that supposedly regulated and still profitable. It's really weird how developed world mostly ignores third-world model of private mini-buses.
(I would also describe the minibus as poorly maintained, but that’s by European standards — I was really surprised by the poor condition of American vehicles on each of my three visits, and it didn’t seem significantly worse than an American vehicle).
If this jitneys are really worse, there is no need to forbid them, municipal buses will outcompete jitneys.
For example, someone can undercut you on price by taking risky shortcuts. Therefore your product or service won't sell, but as a society, it's better for everyone that certain standards are met. Hence, regulations on electrical work and plumbing, etc. Same thing with driver's training and sleep minimums.
Real life example is the recent bus crashes in New York City from overworked or underpaid Chinatown buses.