The only way public transportation receives it funding is through the people who pay to use it. By making the services free, it would put more strain on already poor public transportation services. It is a good idea, but it is really flawed because there are costs that need to be paid in order to keep the systems going.
Its dependent on if the company is losing money on gas and maintenence of their vehicles. If they have an alternate means of making profit, then free transportation isn't really the issue here. Any companies that are dependent on their profits(which is basically all of them) to survive will shake their head to the idea of that change.