Most US public transit systems are funded by taxes in addition to fares. The true cost of a bus ride can be many times the ticket price. If the services doesn't provide enough value for the service, let the customer decide.
> that also causes more traffic congestion and pollution because you've got a ton of cars on the road doing the job of a single bus/trolley/train
Buses are huge obstacles to the free flow of traffic (e.g. blocking right turns, slow left turns, blocking car and bike lanes with width) and are heavy polluters (diesel powered, oversized for most of their operating time).
Public transit agencies want to outlaw services like Chariot (https://sf.curbed.com/2019/1/10/18177528/chariot-san-francis...) because they don't want the competition.