The problem with this reasoning is that the free market tends to optimize efficiency very locally. It optimizes the interests of the two parties involved with a transaction, but notoriously fails to account for externalities.
Public transit is a perfect example of that. There are a ton of ways that availability of transit helps society at large, and approximately zero of those are particularly of concern to an individual when deciding whether or not a fare is worth it, or to a transit provider when deciding how much to charge for a ride.
The free market is not magic. It's just a simple optimization process. And different optimization processes have different limitations. If you try to optimize a problem without accounting for the limitations of the process, you'll get bad solutions.
Public transit is a perfect example of that. There are a ton of ways that availability of transit helps society at large, and approximately zero of those are particularly of concern to an individual when deciding whether or not a fare is worth it, or to a transit provider when deciding how much to charge for a ride.
The free market is not magic. It's just a simple optimization process. And different optimization processes have different limitations. If you try to optimize a problem without accounting for the limitations of the process, you'll get bad solutions.