Honestly, its seems bizarre to characterize "Walk on the Wild Side" as transphobic (or the famously bisexual Lou Reed). I would really need to see the particulars of that argument.
I've always taken the song to be a positive presentation of some of the personalities surrounding Andy Warhol. Their lives had a gritty component no doubt. I admired Lou for telling it straight; I thought he was courageous, and still do. It was a tough world for transgendered people in the '60's. Not that it is a piece of cake today.
The girls in that song are featured in other songs in his ouvre. Here are the lyrics to "Candy Says", written about Candy Darling. These are not transphobic lyrics. Rather the opposite.
lyrics to "Candy Says"
Candy says, I've come to hate my body
And all that it requires in this world
Candy says, I'd like to know completely
What all they discretely talk about
I'm gonna watch the blue birds fly
Over my shoulder
I'm gonna watch them pass me by
Maybe when I'm older
What do you think I'd see
If I could walk away from me
Candy says, I hate the quiet places
That cause the smallest taste of what will be
Candy says, I hate the big decisions
That cause endless revisions in my mind
I'm gonna watch the bluebirds fly
Over my shoulder
I'm gonna watch them pass me by
Maybe when I'm older
What do you think I'd see
If I could walk away from me
Songwriters
Reed, Lou