> On a side note we should drop the public bit of this because it implies a bus is “publicly funded” but highways aren’t. Both are subsidized by the taxpayer.

Arguably, neither of them should be. Give poor people money, instead of giving free highway access (and bus transit) to rich and poor alike. Rich people don't need our help, and poor people would rather have the money to spend as they wish instead of other people deciding for them what alms they should consume.

Individual cars have worse externalities than busses, so that means we should tax them more than busses. Though I suspect once drivers of cars and busses are paying non-subsidised prices for road access and fuel, busses will naturally look better in comparison, no extra tax differential needed.

It distinguishes it from private transit like Uber and taxis and even shared ride vans.

Very much so. When I was younger I assumed fares were for the cost of the public transport, but after following some local budgeting discussions I was stunned by how little the fares covered operating costs.

Small amounts of cost sharing are a useful technique for incentivizing people to make wise decisions in general, so there’s some value in having token small fares. It’s the same difference that shows up when you list something for $10 in your local classifieds as opposed to listing it as FREE. Most people who use classifieds learn early on that listing things for free is just asking for people to waste your time, but listing for any price at all seems to make people care a little more and put some thought into their decisions. I’ve often given things away for free after listing them for small amounts in classifieds because it filters for people who are less likely to waste your time.

Not nearly as much as cars and highways are subsidized.

Strong Towns talks quite a bit about how especially suburban roads are not financially sustainable.

Yes, but with fewer dollars than roads.