I've been staying in the Torbay area in the UK where the local bus company has a 5 GBP ticket for unlimited local travel in one day, or 18 GBP for a week.
I think that the point is that once you reach the point that all the locals who will take the bus are already taking the bus then you have to consider how to attract people who don't normally take the bus (train, etc.). At this point the marginal cost of carrying an extra passenger is almost zero so any extra sale is almost pure profit. So you can drop the price quite low, just make it competitive with the cost of parking a car and away you go.
I think that the point is that once you reach the point that all the locals who will take the bus are already taking the bus then you have to consider how to attract people who don't normally take the bus (train, etc.). At this point the marginal cost of carrying an extra passenger is almost zero so any extra sale is almost pure profit. So you can drop the price quite low, just make it competitive with the cost of parking a car and away you go.