What you'll find is that people use public transit in cities where its convenience outweighs the convenience of a car. In cities where that is untrue, only those who can't afford a car use public transit.
Which is to say that public transit isn't somehow magically better than auto travel by virtue of some fixed aspect of public transit.
It's better when it's better, which may sound like a tautology, but is actually just kind of an obvious truth, evidence for which is available all over the world.
In big Russian cities it is way more convenient, cheaper, quick, and as pointed out -- mentally relaxing -- to take a tram or subway than to drive your car in the insane traffic. The clientele on said public transport are, for the most part, friendly, and you will see men scrambling to help old ladies or women with strollers onboard.
For a brief moment I thought Mrs Thatcher had risen from the dead and signed up to HN. Whew.
Sure, but the alternative to inefficient government spending on mass transit isn't some free market solution; it's inefficient spending on automobile infrastructure.
Do governments have to be inefficient? Can they be designed better?
In general, a free market competitive approach is always preferable where possible, but I think there is room to add better incentives in government as well.
This assumes that everyone has access to a car, and that all automotive commutes are possible during "rush hour". Many businesses directly benefit from public transportation by expanding the labor pool to those who would otherwise be unable to commute.
Businesses, especially consumers, are helped more by the mobility of a car than public transport
>improved mental health of passengers
1. This is not an external benefit. This, if true, should mostly be reflected in people's willingness to take public transport. Of course, people taking public transport are in my experience usually of the most dubious mental health. So that's concerning.
> reduction in pollution and traffic
Fair points.
Traffic is by far the best case for running public transit at a loss, IMO. Though it must be weighed against spending that money on more freeways.
There are benefits, though not as many as you are listing, and we should be weary of running them at too much of a deficit.
In general the idea of running things as a business is not to say they should be run at a profit, it's to say they should be run efficiently like a free competitive market typically does.