Axle weight is a really good point tbh, if you don't have to pay labor costs for the driver it'd make a ton of sense to downsize. Ideally this would be accomplished with taxes on gross vehicle weight. Would make smaller vehicles inherently more economical.

I'm not sure the cheaper argument actually works out in other areas though. If due to peak capacity requirements you have to buy and operate two minibuses vs one full sized bus then that one full sized bus is going to be cheaper to maintain/clean/etc.

However if it's a low utilization route then for sure a minibus is a no brainer. Seems we see that model deployed in a lot of locations referenced above (excluding dollar vans etc, which I see more as a failure of the state tbh).