If you were going up and down hills, would you still use steel wheel in steel rail unless you had some sort of cable to work with? I always thought the Muni did relatively level routes for that reason? The Lausanne m2 for example uses rubber (well, ideally you’d be able to just balance the train going up with the train going down, but that only works for simple inclines with limited stops). Actually, a battery powered rubber wheeled tram service on some sort of steep incline like SF’s cable car routes could get some wicked regen going down.
Even if level, they could still get some regen from making stops.