I think parent was suggesting giving some free rides away, not getting rid of fares altogether. Getting rid of fare collection services and infrastructure does save on costs (often comparable to the amount collected, as you say), but once that's done, then demand would presumably increase and possibly outstrip supply. At which point you need to increase supply (expensive, and you're not getting anything back from it), or decrease demand (by charging people for a journey). Every transport system will have it's sweet spot, and some cities have different priorities that others.