Existing bus services aren't subsidized for the popular routes, they are subsidized for the unpopular routes. When you take the bus at 10 PM, and are near the

Existing bus services aren't subsidized for the popular routes, they are subsidized for the unpopular routes. When you take the bus at 10 PM, and are near the end of the line, and you are the only one on the bus for 10 minutes... that's what is subsidized. A private bus company could just say, "sorry, not enough passengers to run that route today."