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Fuck Cars
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Smaller buses. Some cities just use vans for smaller routes.
Sure, I've seen that, so you got me thinking on it. The largest city near me has 1 way adult bus fare at $2.20 one way and express bus fare at $3.00. The city's internal minimum wage is $25/hour. To add an extra vehicle you would need a minimum of 8.3 passengers per hour of service to recoup costs of just the driver's wages. This doesn't include vehicle maintenance or all the other costs of employment (contributions to his 401k, contributions to the pension fund, the employer match for personal insurance, workplace insurance, etc).
Realistically you probably need greater than 12 passengers per hour per extra vehicle you add and that's on speculative hope that if you reach a certain coverage threshold people will use it rather than drive their own car. It explains itself why it's a hard sell to politicians.
Your public transit has to pay for itself? Are your roads and sidewalks self-funding too?