It costs 3x as much, and it's a hassle to get on without a smartphone. That's how it competes.
It's a bus that tries to price out the poorer people (and doesn't serve their neighborhoods. And is most convenient with a smartphone). Their bet is that you won't miss the $4 per ride surcharge if you can avoid dealing with poor people.
Atrocious public bus service impacts the poor much more than those who are better off: someone with a salaried professional job who comes in late a couple of times a week due to Muni will usually not even register on the organization at all, whereas someone making minimum wage on a time clock will likely be fired for that -- and thus strongly motivated to pay extra for a transportation mechanism that is likely to arrive on time.
[1] http://www.pewinternet.org/2013/06/05/smartphone-ownership-2...
But sure, smartphones are pretty widespread these days. If that were the only factor biasing these busses towards the wealthier end of the society, then the bias wouldn't be very much.
It's not the only factor.
If you don't own a business, you are in the same class as 99% of the population.
Buses are usually filthy, massively overcrowded during rush hour, often very late, and make frequent stops. In many cases, taking the bus is only slightly faster than walking. Compounding the problem is the lack of buses on many popular commute routes, such as the Lombard-downtown route that Leap follows.
They will either avoid these pitfalls or go out of business, because nobody will pay 3x more for a private bus service that is just as bad as the 1x public bus.
I live in Soma, within one block of stops on several ostensibly good bus routes, but I still find that I need to be going at least 2 miles (sometimes even 3, depending on the destination) for it to be faster to bus than to walk. This obviously wouldn't be the case if any of said bus routes stuck even remotely to the stated schedule, or if traffic was at least somewhat predictable. Heck, it wouldn't even be the case if the real-time bus tracking worked (it doesn't), because then I could at least time my departure to avoid waiting 15+ minutes at the bus stop.
Traffic is probably the biggest factor that causes randomness and there's no avoiding that, private bus or no.
Bicycling, though... is often the fastest way for me to get around the city.
These are symptoms of the same problem. In France (at least in Grenoble where I worked for a year) there are dedicated bus lanes (dedicated lights for those lanes). Without those, buses are subject to the same issues caused by traffic.
I agree with the commenter above who remarked that the public transport woes are due to poor urban planning. To answer why urban planning is so misguided you'd have to follow the money.
The same can be said for a lot of jobs, including so-called "software engineers." You can pay people in Romania $300/day instead of paying someone in SF $1,800 a day.
The starting wage is $18 an hour, going up to $30. The $70k is with overtime. So the starting worker probably does make more like $35k, which isn't exactly amazing in San Francisco.
Maybe medical? Actually, I would appreciate an app that let me consult with a doctor without having to actually schedule an appointment and go to the office - just to determine simple stuff like "does this need stitches?".
Granted, that's an area I'd be a lot less tolerant of someone who isn't complying with any regulation or laws.
I suppose on a per-rider basis this generates more revenue - because it costs a lot more.