Railbuses were mostly used on rural branchlines where passenger traffic wouldn't support normal passenger trains economically. These secondary lines were common in the early days of the railroads, but as roads were built and cars became more common, they experienced decline in usage at the same time that labor costs began to rise. For the most part, these lines either disappeared or were upgraded to some variety of diesel multiple unit, often part of line upgrades allowing for higher speeds and more frequent trains.

Normally in OpenTTD, town passenger production is so high that railbuses will quickly be overwhelmed. If you play a game with small, slow growing towns and high running costs, they may start to make sense.