I'm surprised so many people are for the Morrowind system, as it means more work for the player, but it always seemed the most balanced and encouraged travel and exploration a lot more than the system in Oblivion. That, and the fact that the forms of transportation were so out of the ordinary made for an interesting gameplay experience.
I am for both methods at different times. If I'm in the mood to seek a waypoint to travel, then I'll do that, but If I just want to resume play after the PC arrives where I need them, then Fast travel is best. I would like (as has been said), for there to be consequences involved with each mode of travel. The [random!] chance of ambush should always be present in either mode, but the paid transport implies allies if it happens, and Fast travel would (usually) have none unless you had a companion.
With Realtime travel (IE. regular exploration), the PC encounters whatever they pass near and notice. With Fast Travel, the PC is focused on getting there. They take off and single-mindedly trek towards their destination (the game resumes when they get there). With paid travel, the PC (conceivably) has time to stare out, and look at their surroundings more closely, and so perhaps has a better chance of finding something interesting.
So ideally [IMO], both should be options, there should just be added the random chance of an event during the trip (say base chance of 8% :shrug:; with increase or decrease based on 'perks', stats, and politics). If an event happens, the mode of transit affects the result. With Fast travel its more likely an ambush (but could be beneficial (like passing a long dead traveler ~with a purse); With Paid travel perhaps the odds are switched, with a lone highwayman less likely to ambush a group. :shrug: (and a group of bandits having to face the PC and their fellow travelers). Odds for a good encounter can be higher or perhaps not... as the paid travel is assumed to be taking a well traveled route.
For myself I'm fine with either or any method. With Fast Travel, I'm fine with an overland map that charts progress as you travel (Indiana Jones style) or immediate transition (barring an event on the road); However IMO the overland map has a bit of the "Sword of Damocles" going for it, and would add suspense ~watching the marker move and hoping for or against having an encounter; (Just like it was in the original Fallout BTW). I would even be all for the option to leave the paid transport mid route if you were stopped for an a ambush or other event, and them continue on without you if that were your choice.