UC Irvine Institute of Transportation Studies

When provided by taxi firms under contract to public agencies, demand responsive transit is essentially subsidized shared-ride taxi (SRT) service. With taxi firms increasingly seek ing, and finding, opportunities to become public transit contractors for the delivery of community level transit services, subsidized SRT seems destined to become an important revenue source for taxi firms and a major form of publicly supported paratransit. In California, subsidized SRT has already become the predominant form of demand responsive transit, with 29 such systems presently operating in the State. 

Based on a study of California's experiences with subsidized SRT, this paper analyzes the issues associated with this recent paratransit development. One general set of issues concern service provision, including the institutional reasons for contracting, competition for contracts, contractual arrangements and their effects, and the cost-efficiency of subsidized SRT. A second major set of issues concern the consequences for taxi firms of becoming public transit providers, including legal implications, operational changes, labor-management relations, the impact of subsidization, and the effects of contracting on the firm's financial situation and future plans. This issue analysis provides the basis for a discussion of the policy implications of California's SRT experiences.