I'm all for considering lower prices for Bikeshare, but your above modelling doesn't work.
TTC capital costs are fixed, the bus doesn't cost any less to buy, nor the tunnels any less to maintain if ridership shifts to Bikeshare.
The operating costs (fuel, an operator salary) only decline if service is reduced, which at most times of day would lead to a downward spiral in ridership as frequency plummeted.
Which would mean a higher subsidy per rider, not a lower one.
Yes the above is the simple case to illustrate why increasing bikeshare makes sense.
I suspect actually what would happen is that the ridership on both would increase due to network effects and people switching from cars.
1) shorter rides where ttc is was delayed would move to bike
2) shorter rides in general would move to bikes
3) buses would have more room for longer rides
4) more people would be able to make use of buses for longer rides where they might not have before because of 1 or because they can now access more routes without long transfers
The end result would be that overall fare revenues would rise, as would overall subsidy but some of that rise would end up going to bikeshare and overall be less per rider total.
Better capital utilization of buses for long distances and better utilization of bikes for shorter distances.
Less people driving = more efficient use of buses.
In this scenario lets say bikeshare increases to 10m by moving a bunch of short trips to bike, and ttc stays at 500m (by attracting new longer riders...but is capital constrained as you said)....we now have a more efficient system, and a lower per rider subsidy (across both systems).
Bikeshare can of course do this themselves, by building a world class system and just converting drivers or transit users. But the fare integration would actually accelerate it, and make it by design.
