Virtually every vehicle which runs a route with frequent stops should have such a system, they use regenerative braking. To brake the motors become a pump and recharge the reservoir. They can get about 80% of the vehicles kinetic energy back into the reservoir.
They use a diesel to maintain reservoir pressure, since it is a constant known load they can run it at constant speed at the efficiency sweet spot.
The hydraulic motors have max torque at start up, so once again it makes good sense to use these for stop and go driving.
With proper choice of materials and cooling there is no reason you could not use water as the hydraulic fluid.
Note that this is a pretty old article, the payback time was computed using $1.50 a galleon gas.