Use Cases

What is On-Demand Transit and Why Does Your City Need It?


Jess Blenkarn


4 minute read

Jess Blenkarn
4 minute read

The term “on-demand transit” has had a huge impact on transit agencies around the world, driving an increasing number of investments recently. In fact, investments in on-demand transit have tripled from previous years, making transportation the fastest growing on-demand industry relative to other industries such as food and grocery delivery. As more and more cities are embracing new technologies and innovative solutions to their mobility problems, on-demand transit will be key to the future of transportation and mobility.

What is On-Demand Transit?

On-demand transit is autonomous technology-enabled shared public transportation service. Passengers use an app to book, pay and track their rides while drivers use the app to validate rider fares, including cash, passes, and contactless options, as well as receive dynamically routed pick-up and drop-off instructions. Driver manifests are continuously re-optimized based on rider demand and changing traffic conditions to ensure the most efficient route is taken each time.

Driver schedules are continuously optimized based on changing driver and traffic conditions.

These services fill the gap between single occupancy vehicles, or transportation network companies (TNCs), and fixed route mass public transit, such as buses and trains. On-demand transit is typically implemented by cities and transit agencies in low-density neighborhoods or areas where fixed-route services are not effective as a reliable and efficient public transportation option for their residents and is usually operated with minivans, shuttles or minibuses.

Traditional dial-a-ride transit services require passengers to phone a call center, where employees manually arrange rides with drivers. This outdated approach limits flexibility and often results in disorganized schedules and limited efficiency. With the innovations of on-demand transit, dynamic schedules are continuously optimized in real-time, reducing stress on call center personnel and drivers, while ensuring drivers always take the most direct route possible.

The existing system is unsustainable. Clogged streets are rising emissions and strangling economic and social opportunity. It is time for cities to take back their streets.

— Boston Consulting Group

How Can On-Demand Solve My Transit Challenges?

On-demand transit is built to solve various transit pain points, including:

  • Low-Density Area Mobility: Improving mobility for residents in large areas with smaller populations and dispersed trip patterns.
  • First-Last-Mile: Providing high-frequency connections that close the gap between fixed-route transit and trip origins and destinations.
  • Underperforming Bus Routes: Replacing expensive or poorly performing fixed-route buses with reliable and cost-effective on-demand transit.
  • Paratransit: Upgrading paratransit to be timelier, more efficient, and on-demand.
  • Employee Commuting: Simplifying your employees’ commutes and ensuring they get to work on time for every shift.
  • Long-Distance Commuting: Reducing the need for multiple transfers and long in-transit times with efficient single trips.

On-demand transit could help cities reduce traffic by 15% to 30%.

— Boston Consulting Group
On-demand transit can be applied to solve multiple transit pain points.

On-demand transit can transform your city into a network of transit systems efficiently working together to improve multi-modal connections and provide residents with reliable and convenient access to city amenities. For example, when the city of San Antonio replaced three under-performing fixed-route buses with on-demand transit, the city experienced a reduction in passenger wait times from 60+ minutes to just 12 minutes.

The service has been tremendously successful as a flexible travel option that helps us become more efficient and provides connections to the places our customers go.

— Jeffrey C. Arndt, President and CEO, VIA Metropolitan Transit

The Benefits of On-Demand Transit

While traditional mass public transit systems are often expensive, inefficient, and unreliable, on-demand transit enables numerous benefits, including:

  • Increasing service coverage and public transit ridership
  • Increasing efficiency through dynamically optimizing schedules
  • Decreasing traffic and road congestion
  • Decreasing costs per passenger and city transit costs
  • Increasing reliability and on-time performance
  • Increasing sustainability and reducing transit’s environmental footprint

By integrating innovative on-demand technology into your city’s transit network, residents can get where they need to go for cheaper than driving a personal vehicle or using ride-sharing services like Uber, and with the assurance that they will arrive on time. In some cases, on-demand transit has reduced cost per passenger by 20%. It’s no wonder that passengers frequently rate on-demand services so highly!

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Service ratings of microtransit services in cities across North America, ranging from 4.7 to 4.9 stars.

Along with riders, transit agencies themselves greatly benefit from on-demand transit services too. On-demand services increase ridership at a cheaper cost than adding more fixed-route buses and provide greater service coverage and efficiency.

I really do think the transit agencies are interested in embracing [on-demand transit]. If they do consider [on-demand transit providers] a partner versus a competitor, it could increase their options in terms of providing service.

— Paul Supawanich, Transport Consultant, Nelson/Nygaard Consulting Associates

Transit agencies are starting to recognize the importance of and need for on-demand transit in cities around the world. This innovative technology truly defines the next mobility revolution, with the power to modernize public transportation and transform the rider experience.

Contact us to learn more about how on-demand transit can improve your city’s mobility.

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