VIEWPOINT

2024

D R T: A K E Y L E V E R T O
BRIDGE MOBILIT Y GAPS
How demand-responsive transport
can help unlock the modal shift
AUTHORS
Empowered by technology and in line withcustomers’ digital habits, demand-responsive
transport (DRT) is extending shared-mobility

Arsène Ruhlmann
Mickaël Tauvel

coverage and optimizing public transit. In thisViewpoint, we examine the extent to which DRT
can help public transport authorities (PTAs)
and public transport operators (PTOs) build
more sustainable, resilient, and human-centric
mobility systems.
IN PARTNERSHIP WITH:

ARTHUR D. LITTLE

VIEWPOINTTECHNOLOGY- ENABLED
MOBILIT Y SERVICE

services which are, by definition, less predictable

As PTOs look for ways to maximize thesegmentation between private services (rideattractiveness and efficiency of shared mobility

hailing) and public services (DRT) — see Figure 1.

systems and transition toward net zero, DRT is

However, DRT has remained a niche market andmoving to the forefront. On-demand transport

lacks integration into global mobility strategies.

services have been part of public transport, but

Four years ago, at the genesis of DRT, we raised

in a limited way:several questions in that Viewpoint; the main1

- Traditional on-demand transport was initiallyintended to run mainly as a service for people

with disabilities and the elderly in rural areas.

-

Prebooking has been a key characteristicof on-demand transport, with rides usuallythan their historical offerings.” Now, ondemand mobility is more mature, and there isquestion was the extent to which on-demand
could complement or replace public transit.
Both have been attempted over the past few
years, with mixed results.
That Viewpoint also concluded that:scheduled the day before pickup but“On-demand solutions may well prove to besometimes requiring one or two weeks’ notice.

harmonious complementary services to public- Service offerings have been mostly siloed, anddifferent types of beneficiaries are not mixed.

The first DRT schemes resulted in more questions
than answers. Adoption and pooling rates were
low, drivers’ paths had to be manually mappedeach morning, and costs were high (euros spentper passenger-kilometer [PAX-km]2) for the PTAs
and PTOs that launched the initiatives.

transit and, in some cases, replace fixed-route/fixed-schedule services, provided there is abusiness case based on accurate demandplanning and sound cost-benefit analysis.
However, the extent to which these solutions
will be operated by private and public players in
the future is still to be defined. The answer will
depend on the ability of public transit operators
to develop the required levels of agility to run

In a 2020 Viewpoint (see “Rethinking On-Demand

services which are, by definition, less predictable

Mobility”), Arthur D. Little (ADL) examined on-

than their historical offerings. It will also depend

demand solutions more broadly and concluded

on whether private players can achieve thethat the success of such services would “depend

appropriate level of flexibility as they work withon the ability of public transit operators toa number of different stakeholders, developing

1

That said, we have no hesitation in recommendingure 1. At the crossroads
individual
andcollectiveservices
tripsto address the public interest at large.
develop the ofrequiredlevels of agility
to run2

In this Viewpoint, a shared mobility system is defined as public
transport (PT) plus new mobility services (e.g., active, shared, micro,
and on-demand) acting as feeders for the first and last mile orcomplementing PT for trips to places not covered by PT.
Passenger-kilometer is the common measurement unit in transport(1 PAX-km = 1 PAX x 1 km).

that operators experiment further as they assess
the opportunities in on-demand public transit.”

Figure 1. At the crossroads of individual and collective trips

PT & rail

Dynamic
DRT~10%-15% ofnationwide
traffic

Private cars
~85%-90% ofnationwide
traffic

PT = public transport
Source: Arthur D. Little

DRT: A KEY LEVER TO BRIDGE MOBILITY GAPS

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ARTHUR D. LITTLE

VIEWPOINT

What has happened since we wrote those lines
four years ago? On-demand transport is mutating
as the result of the following:- Higher equipment rates for smartphones

DRT CAN OPTIMIZECOSTS OF PUBLIC
TRANSPORT

with extended 4G/5G coverage- Better access to mobility-flow data
- Rise of algorithmic solutions powered bydata science/artificial intelligence (AI) anddelivered through software-as-a-service(SaaS) platforms

Today, there are three key questions to consider:
1. Could DRT solve the lack of flexibility foundin traditional on-demand transport (which
requires booking hours or days in advanceand handcrafting daily routes)?
2. Could DRT expand the addressable public
transport market by serving a wider range
of users?
3. Could better optimization (specificallyPublic transport requires high volumes ofpassengers to be efficient, and DRT enables
expansion to both low-density areas (peri-urban
and rural) and in low-demand situations (nights,
weekends, holidays, suburb-to-suburb journeys,and other specific origin-to-destination journeys).
DRT has been introduced in many cities andterritories as a way to:- Extend a bus network in a rural area where

PT operators need to cover large zones withlow density. Traditional bus lines often relyon under-satisfying service (there are notenough buses during the day and/or the routes
do not match people’s needs), which ends up
being high cost because the service drives

through pooling) enhance DRT’s financial

little traffic. Similar to a taxi service, a DRT

viability and coverage rate?

system can provide virtually 100% coverage
while maintaining sufficient flexibility to serve

A L ARGE ARR AY OF OFFERS
Based on expert views and market analysis
completed by ADL’s Mobility Competence Center,
we estimate there have been ~1,400 DRT projects
initiated around the globe, with close to 1,000
still active. We continue to observe an increasein the number of DRT projects. ADL has gatheredvaluable insights on DRT, including:- DRT is versatile and addresses multiple use

fluxtuating demand.

- Assist a group of people with specific needs(e.g., people with reduced mobility or night
workers).

- Optimize the current PT offering by limiting

the number of fixed-line bus stops to enhance
the user experience.

- Group individual rides or combine generalpublic DRT with paratransit.

cases, including extending service coverage,

DRTs cannot successfully serve all thesepartial substitution for traditional bus

customers simultaneously, so PTAs must focus

networks, and grouping of individual trips.

on a few use cases (see Figure 2). Some PTAs have

- Under certain circumstances, DRT can

optimize costs of public transport (PT), due
to lower costs associated with fuel efficiency,
smaller vehicles, and operating only whensuccessfully implemented separate DRT services
in the same geographic area, such as a paratransit
service during the day and night bus service foryoung people.

necessary.

DRT: A KEY LEVER TO BRIDGE MOBILITY GAPS

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ARTHUR D. LITTLE

VIEWPOINT

Figure 2. Four ways to operate DRT
Figure 2. Four ways to operate DRT
1

EXTEND

2

Extend PT network into
areas not covered by core
network

ASSIST

3

OPTIMIZE

4Group individual trips
made in taxi/e-hail

Optimize existing bus
service by limiting numberof stops

Assist populations withspecific mobility needs

GROUP

Use case

Objectives

Not DRT core market•

Service low-density areasat better cost & service
level

•

Reach populations withpoor availability from PT•

Classic bus lines switchedto on-demand•

Dedicated shuttles for•people with limited mobility

Tourist services in
low-density areas•

Servicing of peri-urban
or rural areas•

Night shuttles for young
people or staggered
workers

Bus network at
end of line•

Allow people with reduced
mobility or specific needs
to travel more easily•

Reduce bus-network
operating costs•

Improve passenger
experience by avoiding
stops without boarding••

Introduce a ride on-demand
service at a more affordable
price than taxi pooling•

Servicing of airports
or dense city centers

B2B
B2G

B2C

B2B = business to business; B2G = business to government; B2C = business to consumer
Source: Arthur D. Little

B2B = business to business; B2G = business to government; B2C = business to consumer
Source: Arthur D. Little

Ride pooling: France’s Grand Albigeois
The economic and ecological value of PT lies in

Libé’A service. With a combined fleet, the local

the sharing of rides: passenger pooling lowers

PTA and users benefit from greater flexibility. A

both costs and CO2 emissions. Software solutions

paratransit vehicle no longer needs to make anfacilitate passenger pooling by aggregating DRT

empty trip if a request from a non-paratransit

bookings and merging itineraries. The combination

user is on its itinerary. Bringing the two togetherof paratransit and DRT can also be a strong driveris also useful in fighting the invisibility offor ride pooling. Most local authorities opt for adisability. Less than six months after the merger,

clear separation between DRT and paratransit.

the Libé’A service recorded 7,200 rides (49% of

However, the French region of Grand Albigeois

which were passengers with reduced mobility)

successfully merged these services into its

and a 36% increase in ridership.

BRIDGING THE MOBILITY GAP

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ARTHUR D. LITTLE

VIEWPOINTE XPLORING DR T’ S
FINANCIAL VIABILIT Y

I T I S I M P O R TA N T T O
DEBUNK THE IDEAT H AT O N - D E M A N D
T R A N S P O R TAT I O NSERVICES CAN BE
P R O F I TA B L E

Transit systems are generally sized to absorb
peak-hour riders; the fact that DRT systems haveno peak hours means its resources (e.g., buses andemployees) are better used throughout the day. It
may also allow DRT operators to use PT vehicles
that usually sit idle during non-peak hours.
When discussing financial viability, it is important

On average, DRT services only generate a cost-

to first debunk the idea that on-demand

coverage rate of between 5% and 15% (dependingtransportation services can be profitable.

on the networks) compared to 15% to 40% for

Except in the case of shared taxi rides, DRT

traditional bus services (see Figure 3). Even

follows the traditional financing model of public

relatively high fares do not cover the costs of thetransportation in most of the world, which

service. It is therefore necessary to include it inincludes subsidies.

the PT financing scheme and leverage the fivesuccess factors discussed below.

igure 3. On-demand transit service cost structure includes a funding
ap

Figure 3. On-demand transit service cost structure includes a funding gap

Funding
gap

Lack of scalability of
on-demand network could
undermine benefits ofimplementing & running complex(sometimes expensive) platform

10%-15%

Platform

25%-30%

Vehicles & maintenance

Subsidies

Drivers represent
highest share of costs
Fares

40%-50%

Drivers
Support & ticketing often
integrated with PT network

10%-15%

Support, ticketing, marketing

Source: Arthur D. Little

BRIDGING THE MOBILITY GAP

urce: Arthur D. Little

5

ARTHUR D. LITTLE

VIEWPOINT

5 SUCCES S FAC TORS FOR
DR T IMPLEMENTATION
1. Combine clear objectives withDRT IS NOT A
ONE-SIZE-FITS-ALL
SOLUTION

a customer-centric approach
A DRT implementation must have clear objectives
and take a customer-centric approach. As
discussed, DRT is not a one-size-fits-all solution.
Rather, it’s a targeted response to specifictransportation challenges, including optimizing
existing on-demand offerings, expanding service
coverage, partially replacing a bus network, and/or facilitating the grouping of individual trips.

3. Avoid redundancy. Integrating the service
into existing, widely used applications has
proven more efficient than creating a separate
app. This may include the core network app,a mobility-as-a-service app, a national rail
operator app, or the PT app used by thenearest metropolis (in rural areas). Exploring
integration opportunities with popular local

PTAs should consider conducting both in-houseor global apps (where relevant from economic,

and external analyses to assess DRT’s potential instrategic, and legal perspectives) can further

their area and identify success factors with an eyeenhance accessibility.

toward creating seamless journeys that address
passenger concerns before initiating service.
Note that preliminary analyses on both strategicand operational aspects have a better ROI than aquick go-to-market without studies.

4. Make the user journey simple. This requires
providing an omnichannel ride-booking
solution (phone or app) and integrating fares
within the core network fare system (ormaking it free for a wide range of the public,

There are four major pillars to consider when

as fares do not fund the service anyway).

defining objectives:

Although DRT is a digital-native solution,

1. Develop the service model that best
fits the area’s mobility patterns. Somemodels may require a trade-off between
service performance and population covered(e.g., a high-frequency service in a specificoffering non-digital options such as phonebookings or requesting stops directly fromthe bus driver enhances the user experience.
2. Deploy the right offering

route versus a zonal DRT covering a large

DRT services can be operated using various

geographic area). By carefully analyzing

models (see Figure 4). Each DRT model has

user demographics, travel patterns, andadvantages and disadvantages. Although certain

preferences, PTAs can tailor their model

models are specifically tailored to meet user

to user needs.

requirements (e.g., door-to-door services for

2. Maximize visibility. DRT systems lackphysical stops and dedicated infrastructure.

disabled persons), most universal on-demand
services take one of these approaches:

Investing in vehicle coverings and leveraging
existing marketing channels (particularly
in areas with an established public transit
network such as metro stations or core
network bus stops) can help users becomeaware of the service.

DRT: A KEY LEVER TO BRIDGE MOBILITY GAPS

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ARTHUR D. LITTLE

VIEWPOINT

Figure 4. Several models to operate the service

Figure 4. Several models to operate the service

The stops form an axis
indicating a form of
direction for the DRTClassic bus service
with on-demand stops
but limited detours

Direct service,
shuttles have no
special orientation

ShuttlesTaxi/premium service

Pooling in a dense area

Virtual bus stops

Corner to corner

Trips on main axes
with detours to
optimize poolingBus

Door to door makes trip
pooling difficult & only
relevant for specific services

PRM

Door to door

PRM = passengers with restricted mobility
Source: Arthur D. Little-

PRM = passengers with restricted mobility
Zonal approach. Service is offered in the
Source: Arthur D. Little

the most expensive model, it is usuallyentire area, regardless of destination. This

only feasible for paratransit and elderly

maximizes geographic coverage, reducestransport systems (e.g., Paris’s PAM

travel time to bus stops, and results in higher[Pour Aider à la Mobilité] service).

service quality, including door-to-door
pickup and drop-off. However, it’s difficult
to efficiently pool rides, resulting in higher
per-passenger costs. This type of service also
has limited development potential due its
maximum traffic capacity. This approach isappropriate in:- Dense urban areas with high potential for- Axial approach. Service is provided along
specific routes or axes. This approach
maximizes passenger pooling, since
operations are close to a regular bus service,
and reduces total travel time for most trips.
It is also a straightforward user experience, as
passengers can easily understand the service’sroute. However, the axial approach resultsride pooling, through mostly a corner-to-in fewer bus stops along an axis, potentiallycorner service. Most premium services

covering a smaller population within a given

offer a door-to-door solution (e.g., MOIA

area. This service can operate:in Hamburg, Germany), but this is in direct- With fixed virtual bus stops, such as Illévia

competition with taxis and ride-hailingservices, making it more expensive thanother DRT services.

- Low-demand rural areas where the service
is offered to virtually everywhere inside
to a specific destination. In Mole Valley(Surrey, UK), this door-to-door setting is
combined with free-floating and feederservice configurations, offering intra-zonetransportation while linking people tothe train station. It can also be used as a

Réservation in France, which links peri-urban
areas of Lille to the city center with 21 virtuallines. Virtual bus stops tend to have limited
visibility, which can be uncomfortable forsome passengers.

- With higher routes and timetables

flexibilities, meaning operations run closer
to a traditional bus network, as with Mufmi
Malaga’s large on-demand bus network in
Spain.

door-to-door service in a city, but being

DRT: A KEY LEVER TO BRIDGE MOBILITY GAPS

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ARTHUR D. LITTLE

VIEWPOINT

It is also possible to combine operational models,such as Stuttgart’s SSB Flex in Germany orsuch as mixing a traditional bus line with an

Pfaffenhofen’s Expressbus in Switzerland).

innovative DRT service. In Orléans, France (aHowever, this is not possible in all cases/

300,000-inhabitant metropolis), tramway

countries.

and regular bus lines are connected with andcomplemented by an on-demand network
outside the city center. A regular fixed bus line
would have cost more than €4 per km; a smaller
DRT shuttle, adapted to demand, costs muchless. Complementary features such as noncompetition with existing fixed lines allow PTAs
to adapt DRT timetables to favor fixed lines when
they exist, improving pooling rates.

2. If it should be outsourced, should there
be one or two operators? In some cases,
it’s more suitable to outsource operations
to outside operators. However, outsourcing
the service to two operators (e.g., a PTO andan SaaS player like Padam Mobility) is notalways the best option. With two operators,
the transport company is usually in charge ofrolling stock management and driving, and

3. Select the appropriate industrial model

the SaaS is in charge of spreading the trips. In
some cases, it’s more efficient to outsource it

Depending on the legal framework and level ofto a single operator that either develops thecompetition in their mobility market, PTAs havenecessary technological capabilities in-housethree main options for DRT services (see Figure 5).

or partners with a technology provider.

These two questions can help them select theappropriate model:

It is a good idea to conduct multiple tests
aimed at identifying the most effective model

1. To what extent should DRT be handledprior to the operationalization phase. Given theinternally? This decision depends largely

innovative nature of DRT, beginning the service

on the capabilities of the PTA or PTO. Directin minimal viable product mode makes sense —operation is the preferred model, andallowing incremental adjustments and expansion

this is the standard way of service whenas the project scales.

the PTO is run in-house (e.g., in networks

Figure 5. Three operational archetypes of on-demand transport for
DRT
Figure 5. Three operational archetypes of on-demand transport for DRTSERVICE DESIGNROLLING
STOCK MGMTDRIVING

1

MARKETING &DISTRIBUTION

TRIP SPREAD

PASSENGERSERVICE

Transport as a service
PTA

End-to-end contract with third-party service provider

2

Outsourcing
PTA

Contract with transport company

3

PTA/PTO

SaaS contract

PTO

SaaS contract

PTO

Direct operation
PTA/PTO

Source: Arthur D. Little

Source: Arthur D. Little

DRT: A KEY LEVER TO BRIDGE MOBILITY GAPS

8

ARTHUR D. LITTLE

VIEWPOINT

4. Define the best pricing

3. Building up special fares but at anequivalent level. This option is often preferred

PTAs typically have three fares options whenin rural areas and for special services, such as

implementing a DRT service (see Figure 6):paratransit. Special fares can be established

1. Integration with the PT fare system. We

for DRT services, ensuring that the pricing

strongly recommend this option, especiallyremains comparable to other transportationin urban or peri-urban areas where there is

options in the region. In some cases, services

a well-established PT network. Integrating

like paratransit may be offered free of charge

DRT fares into the existing fare system offers

to prioritize accessibility and inclusivity.

a seamless experience for passengers and5. Take a data-driven approachpromotes use of the service. For instance,
Paris’s TAD IDFM uses the same fares acrossGathering and analyzing data is a critical successthe region, letting users access any TAD IDFM

factor for DRT. Robust data analysis provides

service with their T+ tickets or Navigo cards.

valuable insights into the service’s operational

By establishing a strong visual identity thatdynamics and helps operators optimize them. It

matches the traditional network, PTAs foster

involves precise monitoring of KPIs such as:a sense of familiarity among passengers that

- Travel times — to understand user

facilitates their connection with the service.

satisfaction and identify improvement areas

2. Applying a premium or surcharge on PT fare.

- Passenger recurrence — to match the needs

PTAs may choose to implement a fee on topof recurring passengers, enhance routes, andof the regular PT fare for DRT services. Thisdevelop effective marketing strategies

option allows operators to set prices based- Occupancy rates — to identify bottlenecks,

on a varity of factors and can help cover thecosts associated with providing on-demandfacilitate capacity and scheduling adjustments,

services. However, higher fees definitely

and ensure optimal resource allocation

impact passenger perception of the system.

With a data-driven approach, PTAs can adapt
their services to optimize costs while deliveringa responsive experience.

Figure 6. Three models of on-demand transport tariff
Figure 6. Three models of on-demand transport tariff
1

INTEGRATION WITHPT TARIFF SYSTEM

2PT SURCHARGE

3

DIFFERENTIAL PRICING~55% of networks analyzed~14% of networks analyzed~31% of networks analyzed

For all travel tickets

Ticket + supplement

Fixed to route (PT model)+
For subscribers only

Subscription supplement

Horokilometric (taxi model)+

Source: Arthur D. Little

DRT: A
KEY LEVER
TO BRIDGE MOBILITY GAPS
Source:Arthur
D. Little

9

ARTHUR D. LITTLE

VIEWPOINT

CONCLUSIONA BOLD POSITION FOR
M O B I L I T Y S TA K E H O L D E R S

D R T L A C K S I N T E G R AT I O N I N T O
G L O B A L M O B I L I T Y S T R AT E G I E S

DRT has a strong potential to address PTA/PTO objectives
with a better integration into global mobility strategies.
Based on our analysis, there are three key considerations
for stakeholders:1	For PTAs. DRT represents an interesting option because
it can contribute to modal shift by promoting sharedmobility. However, comfort should not be the number one
priority, as DRT should not be seen as a premium service
like taxis.
2

For PTOs. Integrating DRT presents both challenges
and opportunities for PTOs. It can be seen as a means tobring innovation and efficiency to PTAs, either before abus tender award or during contracts to optimize theirservices. Operational challenges must be carefully
addressed to ensure seamless implementation.

3

For service providers (fleet and tech). Demonstrating
the added value of DRT compared to traditional bus
services is crucial. Providers should focus on offering
operators smooth and efficient fleet and drivermanagement solutions.

DRT: A KEY LEVER TO BRIDGE MOBILITY GAPS

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ARTHUR D. LITTLE

VIEWPOINTNOTES

DRT: A KEY LEVER TO BRIDGE MOBILITY GAPS

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