buses in san francisco do this. i have no idea how well it's working for them, but as a passenger, it's pretty frustrating to see your bus pass you by when you've been waiting 10 minutes already.
1. The next bus is right around the corner or I have my transit App to give an idea about delay if I cannot see the next bus yet. generally the delay is of teh order of 2 ~ 3 minutes.
2. The next bus is also has less people and the journey is thus more pleasant.
Things do screw up at times though. This weekend, a driver did not stop and indicated that there was a bus following him. The App showed the next bus was 20 minutes behind. I had to catch a different bus after that. I hope this does not happen on working days.