Besides, capital costs of construction and vehicle acquisition absolutely dominates the cost of operation. The problem isn’t that running constantly available service isn’t affordable, the problem is that we lack the political will to make mass transit a meaningful alternative to cars.
I only know about Seattle where they were not paying for no work in the middle of the day. They had a last 2 mile transit van that would take you from your house to the P&R and back for a while. It was because the park and ride was filling up earlier and earlier and so people couldn't get to the bus to ride it. In this case, I know because I asked them how the pay went. They only got paid in the morning and the afternoon, there was no service and no pay in the middle of the day, only during rush hour.
The drivers I spoke to about this didn't like this because there wasn't enough time in the middle of the day to get a different job so they ended up getting a longer than 12 hour day to get 2 4 hour work periods.
