That's an excellent point. Remember, Muni has no incentive whatsoever
to seek out new customers. Each additional passenger mile of service
they provide simply adds to their costs and strains their resources
further. Muni would be much happier if they had no passengers at all;
it would cost less and require less effort.
Muni's planning director said, a while back, that Muni doesn't want any
more passengers; they can't serve the passengers they already have.
He's absolutely right. What Muni needs is a funding system by which
Muni gets its subsidy not as a giant block of money (here's $200
million, now go away), but as a subsidy per passenger boarding or per
passenger mile, or some formula that combines the two. And in which
Muni employees are paid more for providing more service at higher
quality (reliability, etc.).
Right now, all the incentives are backward. Muni is better off,
financially, every time someone chooses to drive their car instead of
take Muni. The city is worse off, of course, but that isn't Muni's
problem, is it?
-- Daniel