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March 5, 2021

What is Paratransit? Understanding its Funding and Challenges

Discover what paratransit is and how you can combat its issues and funding challenges.

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Paratransit is an amazing resource for those it serves, but there are still issues and funding challenges associated.

Merriam-Webster’s online dictionary coins paratransit a 

“transportation service that supplements larger public transit systems by providing individualised rides without fixed-routes or timetables.”

In other words, it’s like a Public Transportation version of Uber—a transportation service that picks people up whenever, and usually wherever, they want.

Similar to taxis, paratransit is considered a form of 'demand-responsive', transit in that it responds to demand for a ride whenever one is requested. This is commonly associated with other terms like ‘On-Demand Transport’, ‘Microtransit’ and ‘Demand-Responsive Transport.’ It’s a little confusing, but they’re basically an extension of the same thing.

Unlike taxis though, paratransit isn’t hailed with a typical hand gesture. In fact, paratransit first became prominent as a response to legislation that sought to increase the mobility of citizens with disabilities—hence the name. Just like any mode of transportation however, it has its challenges and funding opportunities.

What are challenges associated with paratransit?

Politics and bureaucracy are common challenges experienced amongst all modes of transportation. Issues that are unique to paratransit can be loosely placed in two categories: data, and ease of adoption.

1. Awareness and ease of adoption 

Switching from fixed-route to Demand-Responsive Transit can be hard for both agencies and riders. A small rural agency, that may have only run a fixed-route service, likely doesn’t know where to look for a paratransit provider or third party that can do these simulations. Additionally, the process of finding data to support the decision in the first place can seem daunting, turning Agencies off to the idea before seriously considering it.

Riders also need to be aware and ready. Potential riders who aren’t made aware of how paratransit works and have never used it before may have preconceived notions that might prohibit them from using it en masse. Many service providers may not provide a mobile App that can be used on all platforms, or the Application itself may have issues that can turn riders off to the idea. 

2. Data and precedent

Smart paratransit systems perform even better once there is more data on the hot-spots for demand, which may not exist if there was never a paratransit system there before. Since it’s not always clear to key decision-makers whether a paratransit solution is best for a region, a third party or paratransit provider is often needed to simulate how a service would perform. Oftentimes more riders use a transit system once they find it out it’s more reliable and convenient than previous modes. For example, here’s a case study on a data simulation that was done for the MTA, New York City, which helped them determine a clear way forward with their transit service offerings.

That change in demand takes time though. Simulations can capture this rise in demand, but paratransit systems perform even better with accurate data on where demand is concentrated, which may not have been possible to collect if there only exists data on fixed-route systems. 

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Paratransit funding—how do I get it?

There are quite a few paratransit challenges, including being able to source and attain funding opportunities. 

1. It’s up to states and Agencies to find funding

Paratransit service is considered an “unfunded mandate” by the American Disabilities Act. Unfortunately, even though transit agencies are required to provide these services, there is no direct federal funding for them. In 2008, research shows that the average cost of a paratransit trip was $2.26 per customer, while agencies were spending an average of $29.95 per customer per trip.This can make it harder for transit operators to adjust to demand unless their paratransit service provider is data-savvy. 

2. Transportation is already expensive and paratransit isn’t always immediately cheaper

According to, (the unofficial website of Madison, Wisconsin)  The Madison Metro Transit Agency faced a loss of $3.9 million in federal funds between 2017-2018, and planned to implement changes to its paratransit service in 2018 that included increasing fares, a change that was said to have potentially affected about 3,700 riders. 

In NYC, New York's Metropolitan Transportation Authority (MTA) spends more than $70 per paratransit trip and has high per-capita paratransit usage. As a result, the MTA subsidised its Access-A-Ride service last year to the tune of $256 million. Although there are a plethora of ways to cut costs, most involve bureaucracy and sometimes further investment.

Paratransit funding solutions

There are many ways to lower the costs of paratransit.

A report from the Rudin Center for Transportation at NYU lays out how to provide quality paratransit service without breaking the bank. They were:

  1. Partner with ride-hailing service providers
  2. Modernise ride reservation and fare payment systems
  3. Provide real-time information
  4. Right-sized vehicles

New York City's Citizens Budget Commission (CBC) recommends reducing costs for their Access-A-Ride by stopping automatic door-to-door service if it isn’t needed. An adaptive, data-driven paratransit service gets better at forecasting demand as more data is accumulated, resulting in maximised vehicle capacity, and a more efficient service. While this may drive costs up overall, the cost becomes justified as more people are getting to places faster than other modes of transportation. Data on usage showing increases in demand is invaluable for grants, and continued funding.

For rural areas, Formula Grants for Rural Areas is the FTA program specifically intended for rural public transportation. It provides funding for operating, administrative, planning, and capital projects including (but are not limited to):

  • Purchase of accessible vehicles
  • Accessibility equipment on vehicles
  • Construction or rehabilitation of transit facilities (including accessibility improvements)
  • Mobility management projects (which can include travel training and coordination projects)
  • Preventive maintenance (which can include maintenance of lifts and ramps) 

Overall, paratransit works better than most other modes of transportation for very dense, to moderately sparsely populated areas in terms of cost, ride-time, and sustainability. However, it is far better than any in terms of rider experience and convenience for obvious reasons. With something as important as public transportation, transit agencies aren’t expected to immediately embrace a service they know nothing about, but that’s where the help of technology and solution providers come in.

Interested in paratransit solutions? Learn more about integrating a fixed-route and paratransit service.

About the Author

Justo Karell

Justo Karell


Data Scientist based in NYC that is passionate about Simulation Engineering, transportation access, eradicating homelessness, and improving the decisions and opportunities of everyday people.