For what it's worth, utilities do care quite a bit about leaks (it's service they are providing which they can't bill for!) and use various testing apparatus to locate leaky parts of underground systems for repair and replacement.
Considering the difficulty and cost of repairing underground anything, most of which will be there for many many decades, it's never going to be perfect, but there's a lot of resources that do go into improving this.
Why can't they bill for it? It's not like they are losing money on it, it's simply getting priced into the billable services they provide. Utilities are usually monopolistic, so there is little incentive for them to fix this.
Fundamentally it is getting priced into services provided to residents as a whole. But you're also forgetting water is generally not provided by a business: Local government is not a profit enterprise, and generally has a lot of pressure to reduce (or limit the rise of, anyways) the bill.
I can tell you factually a lot of work goes into measuring leakage, narrowing down what part of the water system it is coming from (most active components are metered in some way, and you can use math to determine where all of the water is not making it through a segment), and correcting those issues where it is cost-effective to do so.
For profit water companies are common. Municipalities do not have the capital to replace infrastructure, so private companies like American Water buy the pipes and plants, make the minimum fixes, and jack up rates to pay back investors.
> so there is little incentive for them to fix this.
This kind of stuff is typically death by a thousand cuts.
Add on that a lot of the places it leads are under roads that will have to be shut down for weeks/months and you start to realize the costs and impact of fixing these leaks are enormous.
If it is a local leak they can fix it in a few hours but most often the whole pipe leaks (or maybe every joint) and so the whole road needs be redone - thus it is worth waiting for the road to wear out.
They do, but rates are regulated, they can’t just tack on this month’s pipe replacement expenses. They have to make a guess, propose a rate increase, and get it approved by the relevant regulator or government authority.
Considering the difficulty and cost of repairing underground anything, most of which will be there for many many decades, it's never going to be perfect, but there's a lot of resources that do go into improving this.