Luxembourg to become first country to make all public transport free
theguardian.com
theguardian.com
Also I think free buses potentially means you can design buses for very quick entry/exit.
'Free' or 'Unlimited' services can quickly find a small proportion of users use far more than a regular amount of the service, often for no big-picture economic gain.
Pretty much any place that has public transport also has "unlimited" plans, so if there were horror stories related to those, I guess we would know. Maybe you have something concrete to share.
As for the homeless... sure. But to solve that, just solve homelessness and you will have fed two birds with one scone!