The original argument doesn't hold though: even if a bus line isn't profitable in a place because there's not enough people doesn't mean that a cheaper taxi service wouldn't be.
As far as profits on rural lines… each line doesn’t need to be equally profitable. Some might even lose money, as long as the popular lines can make up for the less popular ones. There is a significant value to a community in having ubiquitous coverage.
It's always going to be a trade-off
We had rails 200 year ago; it’s a solved problem that mostly requires political will and capital allocation to execute.
Self driving cars have been in development of some kind for at least 40 years[1] and it’s still a struggle technically, and will still require some political will going forward as we try to solve all the legal problem they bring up, and the development has also been very capital intensive[2].
If we have to spend the money and deal with the politics anyway, why not put that effort toward something we know works, we can do today, will reduce traffic on roads, and has a better safety record than automobiles.
Augmenting a rail system with some kind of taxi system is fine, but it seems odd to put all the eggs in the autonomous car basket. We were promised cars would be driving themselves across the country 6 years ago, and it’s still just promises[3]. How long are we willing to wait for something that’s actually viable for the masses? And how much are we going to pay per ride? Right now it looks like it will be more expensive than hopping on a train.
People often say Elon pitched the HyperLoop and Boring company ideas to try and kill rail plans, since he owns a car company. I have to wonder if these someday promises of self-driving are a similar tactic.
[1] https://en.m.wikipedia.org/wiki/History_of_self-driving_cars
[2] https://www.bloomberg.com/news/features/2022-10-06/even-afte...
[3] https://www.notateslaapp.com/news/1474/elon-musk-says-tesla-...
[1] "Depending on bus type, driver cost accounts for between 40 and 70 per cent of total bus operator cost in Singapore (Ongel et al., 2019) and Australia (own calculation based on ATC, 2006). In Japan, driver salaries account for 53% and 70% of total operating costs of buses and taxis, respectively (Abe, 2019)."
https://www.sciencedirect.com/science/article/abs/pii/S22120...