Transit is basically free in my city. Just look down on your luck and the drivers will wave you through. If they are running behind they will yell at you to “just get on” instead of paying because they care more about being on time than collecting $2.50 (minus credit card fees, minus admin fees, minus grift, minus whatever else).
It seems to work okay. They crazy folks and (extremely) smelly folks would get refused service even if they had $2.50 so I don’t think that is a valid concern.