I can't comment on all Transit agencies, but in most cases Publicly owned transit systems are funded 4 ways-Federal(gas taxes or transit funding),State/Province(same as feds),City taxes & fares.
To run the TTC its over a billion dollars a year.
The issue with offering "free Transit" won't work as:
1)you'll always have those that will never take Public Transit
2) the cost factor for tax/gas fund will go up greatly to pay for the loss of fares.
The issue with the Presto cards(in Ontario run by Metro Link )is that if you don't use their system the province won't give you any portion of the Provincial Gas Tax(another Liberal "Buddies aka Metro Link)
What you have to realize is running a Municipal Transit system is not cheap. As an example the TTC's Novabuses 60 foot artics cost over $650,000/unit. Go's Alexander Dennis E500's(Double Decker's) cost well over $750,000/unit, OC Tranpo's NFI D60LFR(artics)cost over $750,000/unit. So that's just for buses and if you operate a multi transit system(IE subway,Streetcars,Buses-TTC,Buses & Trains-GO Transit,Buses,Diesel Trains-O Train & LRT(2018)-OC Transpo your cost are even higher.
Getting back to the original post, yes Public Transit has competition -IE Car sharing,Uber,Taxi's etc, but to blame it on Terrorism & Netflix come on.
It's fun being weird It's fun being weird It's fun being weird You should try it sometime. The Detour