It is entirely the first reason - mass transit is not cheap and fares help alleviate the burden of the subsidy.
I don’t think the cost of issuing tickets and enforcement is that significant compared to how much money collecting fares brings in. It certainly doesn’t seem like something that is done at a loss or something that barely breaks even.
Almost no public transit system has a farebox recovery rate even close to 100%. For municipal service (ie, excluding specialty transit), even 50% is almost unheard-of in the US, and only a few systems in Europe exceed 50% as well. In the US, the better transit systems have a farebox recovery ratio of 25% or less. In other words, over 75% is already funded by taxes, not by point-of-service.
Enforcement is a huge cost. In fact, in NY, the government has decided to spend increasing amounts of money over the last five years on police presence to combat "fare evasion", even though their own numbers show that the amount of money they are "losing" to fare evasion is less than the amount they have decided to spend on the additional police dedicated specifically to fare evasion.
So yes, it's a political, choice, not a fiscally rational one.
Sort of, not exactly. Asian countries typically report their metrics differently, so they look much higher, but it's because they have non-fare sources of revenue that provide a massive source of income which they combine with their fare revenue for reporting purposes. So it's not an apples to apples comparison.