Starting Your On-Demand Transit Service: Things to Consider

Starting Your On-Demand Transit Service: Things to Consider

When we look at various bus transportation options, fixed route services were the most affected by the Covid-19 pandemic, as agencies dramatically reduced routes to cut costs amidst the uncertainty. Meanwhile, on-demand transit options started gaining more importance, due to the significant cost savings and flexibility they offer to both agencies as well as riders.

The Canadian Urban Transit Association (CUTA) released an 'On-Demand Transit Toolkit’ to guide agencies considering implementing these services. Given that every agency's needs are unique and dependant on several factors, CUTA's aim is to help agencies understand the space holistically and ask themselves the right questions before implementing on-demand transit services.

What are On-Demand Transit services?

On-demand transit services are a type of public transportation system that enable passengers to book and pay for rides via an app or a phone call, while drivers use an in-vehicle device or an app to receive pick-up and drop-off instructions. The system continuously updates driver manifests to reflect the changing traffic conditions and provide the most efficient route.

Where can On-Demand Transit be implemented?

Some of the examples where on-demand transit can be implemented would be in areas with low transit demand, low population density, in areas with disconnected road networks which impede the efficient utilization of fixed-route transit services, to compliment other existing services or to widen service coverage.

How does On-Demand Transit work?

Traditionally, booking an on-demand transit service ride involved riders calling a central helpline to book a ride for a particular time and date, after which the agency-allocated vehicle picked them up from their location and the rider paid for the trip in the bus. Today, the process has been simplified with agency apps and websites powered by the likes of TripSpark’s Rides on Demand, making it easier for riders to book an on-demand transit service ride and get to their destination.

How can agencies setup On-Demand Transit services?

As an agency, providing an on-demand transit service essentially means being able to provide rides at the right place and at the right time, in a very cost-efficient manner. To be able to do so easily and efficiently, vehicle routing and dispatching can be managed autonomously through a combination of the right transit software and in-vehicle technology.

This combination gives you an overview of your vehicular fleet in real-time, helps identify efficient transit patterns according to demand times & zones and enables you to run on-demand services as cost-efficiently as possible, without the need to manually log trips and edit driver manifests. TripSpark’s Novus 7, the latest version of our time-tested on-demand transit software, used by 100+ small and mid-size transit agencies across North America, can help you get started with your on-demand transit service.

To give you a holistic picture of starting your on-demand transit service journey, CUTA has classified it into five key areas –

1. Planning
2. Operations
3. Accessibility Friendliness
4. Customer Experience
5. Data Monitoring & Performance Evaluation



Planning your On-Demand Transit service

Given that every agency has its own nuances depending on its location, region and applicability of state & federal regulations, CUTA recommends asking yourself the following questions, in order to correctly determine the applicability and relevance of on-demand transit services to your agency.

1. What are the objectives and goals of the service?

2. What is the size of the service area?

3. Who is the customer base (ex – students, seniors) the service is trying to serve?

4. What will be the service delivery model?

5. What type of vehicles will be used and how many?

6. When will the service operate?

7. What are the benefits of implementing on-demand transit into the current system?


A key feature of planning your on-demand transit project is to lay out a roadmap for your vision of the service. To make this easier, here are the steps you’ll need to follow to move from an implementation stage to a test run, before rolling it out to the general public at a larger level.

Figure 1 – Illustration of the on-demand transit service implementation process. Source: CUTA On-Demand Transit Toolkit, May 2022



Once you have moved past the high-level planning stage, its time to get into the details of the plan. Some of the questions you need to ask yourself at this stage are –

1. How do you envisage your operations to work?

2. Do you want to run your on-demand transit service yourself or do you want to partially/fully outsource the operations to a third-party?

3. What is the most cost-efficient yet reliable option out of all the available ones?

4. What would the fare structure be? Would it be fixed-rate fare, distance-based or a free service altogether? What would be the implications on your finances?


Figure 2 – Flowchart to decide the right operating business model for on-demand transit service implementation. Source: CUTA On-Demand Transit Toolkit, May 2022



Historically, in several regions, paratransit services (also known as specialized transit or custom transit) have operated with the on-demand model, sending out a vehicle to pick up riders as and when requested. While planning on-demand transit service for your agency, accessibility is a very important consideration in designing vehicles, stops, and routes for persons with limited or restricted mobilities.

You could also maximize the use of your fleet without additional vehicles or capital resources by using a comingling option, where your paratransit and non-paratransit on-demand passengers could ride together in the same vehicle. TripSpark’s Novus 7 software handily manages comingling for your on-demand services and reduces your costs.

On-demand transit service can increase transit access for low-income populations, people living with disabilities and people with limited or no access to private vehicles. Compared to fixed-route services, on-demand transit schedules are more flexible and operating hours could be longer, allowing individuals with varied travel needs and travel times to be accommodated. If the proposed service area had no existing transit service, a new on-demand transit service can provide critical transit access to individuals who have never had access to transit.

Depending on their reason to travel, various population segments use on-demand transit to fulfill their requirements. Here’s a tabular summary of various segments' preference for this type of transit.

Figure 3 – Population segments with highest potential for using on-demand transit options, ranked by trip purpose. Source: CUTA On-Demand Transit Toolkit, May 2022


In-line, here are some of the considerations that you’ll need to make in order to create an accessibility-friendly service –

1. Providing options to call or text to book rides

2. Providing options to book in a different language (based on local demographics)

3. Providing accessible vehicles that can accommodate wheelchairs, strollers and other mobility devices

5. Providing tablets or areas with free internet or Wi-Fi access to book trips

6. Permitting both cash and electronic forms of payment

7. Ensuring stops are accessible (ex – ramp-friendly sidewalk near the stop)

8. Providing exceptions to some trip criteria such as time-of-day restrictions or minimum trip distances


Customer Experience

Once you have the building blocks of your operations ready, making your existing and prospective riders aware of the new service you are offering is the next step. Providing a seamless customer experience requires some marketing effort, like running outreach programs in your city, spreading the word about your new service through local newspaper, radio and tv stations, social media and other such channels. For more such ideas, take a look at a blog we recently published, where we discussed several ‘nifty-yet-thrifty’ marketing ideas to help agencies market themselves effectively.

Some of the other aspects that you’ll need to consider are providing real-time information about your vehicles and schedules through your app and website, SMS and IVR notifications for riders without smartphones, multiple trip booking facilities and digital payment options. TripSpark’s Rides on Demand can enable you to offer all these facilities under your own agency’s name, within your budget.


Figure 4 – Visual overview of Barrie Transit’s on-demand transit service. Source: Barrie Transit On-demand (


Data Monitoring & Performance Evaluation

Once your service is all set and ready to go live, the next important step is to evaluate your performance and feedback. An important observation that CUTA determined from American transit systems that implemented on-demand transit was that its success or failure should be determined based on performance metrics that look at not just ridership and farebox recovery, but also several other parameters like customer experience across various population demographics, improved mobility and increased safety.

Transit systems are under increasing pressure to improve performance and balance demand for service while simultaneously juggling financial constraints. That’s why, it becomes imperative to continuously measure key performance indicators (KPIs) like vehicle utilization, cancelled or no-show trips and other such parameters closely, to ensure that your resources are being efficiently utilized. TripSpark’s Novus 7 software can help you identify and track such parameters critical to your services’ success.


Figure 5 – Measuring performance of on-demand transit service systems. Source: CUTA On-Demand Transit Toolkit, May 2022


Additionally, reporting it in the expected format to state & federal regulatory bodies is another challenge for a lot of agencies. TripSpark’s Novus 7 software has advanced, in-built reporting capabilities which enable you to generate NTD-format-ready reports, without spending a tremendous amount of time and effort doing it yourself.

For more such details into each of these key areas discussed above and for live examples of several agencies who have implemented on-demand services in their regions, please take a look at the full CUTA on-demand transit toolkit report.


If you found this information useful and would like to know more about setting up your own on-demand transit service, please feel free to get in touch with us anytime – we’ll be happy to help out!