You're right that new bus routes have a very low marginal cost, and that buses move more people per transportation dollar than other forms of public transportat

You're right that new bus routes have a very low marginal cost, and that buses move more people per transportation dollar than other forms of public transportation, but without expensive dedicated lanes they are certain to be slower than cars, and therefore most otherwise merry takers of public transportation avoid using them. Another unfortunate problem with buses is that changing the bus route is pretty much trivially easy, with the consequence that they do change an awful lot (at least here in Boston), which means that buses generally provide really unreliable transportation. Montreal has a great bus system, iirc. Dedicated roads, dedicated, clean, underground tunnels. Probably super expensive. Alas.