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Today we are exploring the brilliant world of buses.

Could demand responsive transit force this industry to evolve?

Let’s find out!

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Demand Responsive Transit

Demand-responsive transit (DRT) is revolutionising public transport in Australia by offering a more flexible and efficient alternative to traditional bus services 

It involves the use of apps or online platforms that allow passengers to book bus rides based on their specific travel needs, rather than adhering to fixed routes and schedules.

These systems use advanced algorithms to optimise routes in real-time, adjusting for passenger demand and improving operational efficiency and accessibility -  especially in areas with lower population density or limited public transport options. 

DRT services are being piloted in various regions across Australia, with the potential to transform the way people travel and significantly reduce reliance on private vehicles.

Potential Impact

The urban bus and tramway transport industry in Australia is worth $8.2 billion in 2024. Private and public bus services constitute roughly 60% of this industry, and therefore the Australian bus services industry as a whole is worth about $4.92 billion AUD.

Provided demand-responsive transit services become more widespread and grow in popularity :

In a low growth scenario, where demand-responsive transit only comes to account for 5% of this industry, the market for demand-responsive transit would be worth about $246 million AUD.

In a high growth scenario, where demand-responsive transit comes to account for 20% of this industry, the market for demand-responsive transit could potentially be worth as much as $984 million AUD.

Why this WILL be disruptive:

• Improved Efficiency and Cost-Effectiveness: DRT systems can reduce operational costs by optimising routes and vehicle allocation based on real-time demand. This is particularly valuable in low-density or off-peak areas where traditional fixed routes may not be cost-efficient. By replacing larger, underused buses with smaller vehicles, DRT can provide a more efficient service while lowering operational expenses​.

• Enhanced Accessibility and Flexibility: DRT increases accessibility, especially in suburban or rural areas that are underserved by fixed-route buses. Riders can book trips via smartphone apps and receive door-to-door service without the need to adhere to rigid schedules or routes. This flexibility could make public transport more convenient for people in regions where traditional bus services are limited​.

• Government Support and Integration: Australian states, including New South Wales, have been actively trialling DRT services. Government backing, including funding and regulatory support, could accelerate the integration of DRT with existing public transport networks, making it a viable alternative to traditional services in both urban and rural settings​.

Why this WON’T be disruptive:

• Higher Operational and Infrastructure Costs: DRT systems require substantial upfront investment in technology, including ride-booking platforms, real-time data systems, and integration with existing networks. Additionally, infrastructure needs like charging stations for electric vehicles or dedicated lanes can add to the financial burden. These costs may be particularly challenging for smaller operators without significant government support​.

• Scalability and Limited Effectiveness in High-Density Areas: DRT may struggle to serve high-density urban areas or peak travel times where traditional fixed-route buses can carry large numbers of passengers more efficiently. In these environments, the cost-effectiveness and operational complexity of DRT may be less favourable than established services​.

• Public Resistance and Acceptance: Many passengers are accustomed to the predictability of traditional bus services and may be hesitant to adopt DRT, particularly older adults or those without smartphones. Furthermore, skepticism about the reliability and frequency of on-demand services could limit its uptake.