Aerial Trams are generally used where the topology presents challenges for more conventional modes of transit. They are usually relatively short longitudinal distances, and often with significant vertical differential.They've been implemented with great success in a number of South American cities, among other places, La Paz, Bolivia most notably. Of course, these cities tend to have a lot of dense, poor neighborhoods crammed together on steep hillsides, where conventional public transit is really hard to manage in any reliable fashion but gondolas can just sail overhead.
I think the only two public transit examples in the US are the Roosevelt Island Tramway (which has to traverse the East River at ship clearance height, 250 ft.) and the Portland Aerial Tram which climbs from the South Waterfront to the Marquam Hill neighborhood, 500 ft vertical climb.
Trams are slow (nominally 15 mph), but they are useful for steep vertical climbs. They are typically used for short distances where modest capacity transport is needed. They are not terribly efficient for flat, horizontal transport. Transportation engineers would not specify them for that purpose. Unfortunately public officials seem enamored with them because they are relatively cheap (to purchase, ignoring that they are costly to maintain), and are minimally disruptive to existing ground structures (except at stations).
From a lifecycle cost standpoint (factoring in the high maintenance costs), they are probably one of the most costly modes of transit per passenger mile. They are also operationally inflexible -- you really cannot vary the car frequency, or short turn the route.