Actually, making cars efficient doesn’t work as soon as you reach a certain scale, and I suspect that scale is less than 40k people.
I think you are right that cars are reaching a certain tipping point of efficiency but they still beat the public transit in most categories.
Mass transit has the issue in that it tries to serve too many masters. Should it be faster (more expensive, serving few people)? Should it be serving the less wealthy (more stops, less money)? By trying to appease too many groups of people it tends to miss both marks.