Yeah one guy is going to get a hundred lambos and use them like tissues. Used it for more than a month? Into the trash.
Not really, depending on the thing. There (maybe) comes a point where the accounting of who owes what becomes more expensive than the thing you're tracking.
It can also go the opposite direction. Air is free right now, but then see the movies Total Recall and The Lorax (not joking).
Guess what. In Tallinn, Estonia public transport is free for city residents.
It's not free. You pay it with your taxes.
We also pay for public transit with our taxes in many states/cities in the United States, but they still charge riders. Taxation is implicit in public transit, I'm not aware of a single viable public transit model that doesn't rely on taxpayer money.