[Retric]

The problem is not street cars vs busses it's busses vs cars. If you let cars onto the same lanes as busses then they become worse than cars. Effectively you can have a high bandwidth street level public transit or congestion because cars don't scale at street level.

The core problem is a single lane of dedicated public transit can move more than 10x as many people as a single lane of roads. In minimal traffic areas you can mix busses and cars, but as soon as roads reach there minimal limits near a city you need to segregate traffic.

PS: Cars do with in low density areas and Extreme levels of congestion pricing are one way around this. If it costs 50$ / day to park in the city you get less traffic, but passing such regulations are incredibly difficult.