I have just seen a bus on Mun Mueang Rd with the signage of belonging to RTC Chiang Mai City Bus. Is this a new service similar to the now defunct 20/30 baht bus scheme!

The only recent (Dec last year) info I can find is this;

As of today, the RTC Chiang Mai City Bus has resumed operations in Chi — Booker (bookerthailand.com)

 

It's a return of the bus service that existed before COVID but it's isn't 20/30 baht, it's 50 baht a trip and it has been back since late last year. 

You can get details from their website or FB page.

https://rtc-citybus.com/

https://www.facebook.com/rtccmcitybus/

I've seen the bus around town several times now, but haven't seen more than 2-3 people on it at a time.
They tried municipal bus service two previous times, and both failed.
People don't want to spend more money while having to walk to a specific place to catch a bus that will make them walk again afterward to get where they want to go. A songtow (seelor?) will pick them up wherever they are standing, and deliver them right to their door, and do so for less money.
A smaller 12-seat bus would be more cost-effective, be able to negotiate smaller streets, and perhaps have a chance. These big buses were tried before and didn't work. I really don't know why they are simply repeating their past mistakes.
The concept is great. The fault is in the implementation.