Tens of millions of people live in places where frequent bus service simply isn't practical. It's probably reasonable for society to make choices that overall incentivize against living in those areas, but that isn't going to change where people live anytime soon.
And you can just use taxes to control any induced demand that comes from lower costs or new behaviors. The vehicles have sophisticated tracking systems and telematics built right in.
Buses are as large as they are because the driver's time is valuable. If self-driving cars were cheap you could a bunch of 8 person van/busses on the road that give you most of the environmental/traffic benefit of a bus but could really expand frequency and reach.
lol I did this once with Lyft's cheaper service. One cranky old boomer killed the whole vibe bitching about hte driving "listening to his machine (GPS...)" instead of listening to his own, supposedly superior directions. Wish I'd sampled it.
Adding transit makes people live around the transit - if you let them by not kneecapping them with zoning rules. All this is an emergent property of a system designed to prevent new construction.
Though you're not wrong, in a hypothetical world where most vehicles on the road were self driving busses, the frequency could be dynamically set and reasonable for everyone.
And you can just use taxes to control any induced demand that comes from lower costs or new behaviors. The vehicles have sophisticated tracking systems and telematics built right in.