This paper analyzes the system organization, performance, and taxi firm impacts of California's taxi-based elderly and handicapped (E&H) systems, and compares the results to taxi-based general public demand-responsive transit (DRT) systems. The data were gathered from 48 California taxi-based E&H systems. Shared-ride operation is the key to superior system performance, provides the most favorable taxi firm financial impacts and initiates the firm into the paratransit diversification process. In situations with low demand densities, where the sponsor faces a severe total system cost constraint, organizing an ERT system is probably the only feasible strategy. Taxi-based ERT systems are about 25 percent more expensive than taxi-based general public DRT systems, have less impact on firm revenues, and do little to enhance firm evolution.