You've got the economics completely backwards. Running a bus route has a fixed cost; where the fares collected fall short of that cost, it may be necessary to subsidise that route. You actively want to encourage more people to use that route, because it reduces the level of subsidy necessary. People who find the route merely convenient help to fund the service for people who vitally need it.

Bus subsidies are often remarkably cheap on a per-journey basis, because the service would only be modestly unprofitable without the subsidy. Paying a few pennies per passenger to make a service profitable is vastly cheaper than paying for taxis to ferry all of those people to their destination.

Some smaller, more efficient buses should be also employed.

If market forces aren't aligned with social values, it's sensible to use a different resource-allocation mechanism.