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“Paratransit” is used as a general term for a “demand-response” travel mode, which is operated under more flexible operation and service arrangements than traditional fixed-route public transport systems. In developed countries, it typically represents a shared vehicle system for prearranged trips for riders who are eligible for the particular services (for example, people with special needs).

In developing countries, though, it mostly represents a local public transport system, which is characterized by flexible fares, unscheduled operations, and semifixed routes. Customers appreciate paratransit systems because of the degree of flexibility they provide, relatively lower operation and administration costs for the operators and government, relatively lower fares for the users, and higher labor intensity. On the other hand, because the system is mostly developed by the community or by private initiative, it is harder for it to be regulated by the government, leading to difficulties in not only standardizing the level of service but also other practical aspects, such as fares, safety, and the size and vehicle-type of fleets.

Paratransit is an alternative mode of public transportation that is provided by private or public operators for a certain group of users or to the general public. This mode of public transport is adaptable in its routing and scheduling to individual users' and/or operators' desires in varying degrees. While the implementation and the use of this mode differs in developed and developing countries, it ultimately fills gaps not being served by private cars, buses, and other fixed-route systems.

Typically, vans or minibuses are used to provide paratransit service. In some countries, it is also common to use taxis, jitneys, modified station wagons, three-wheelers, and motorcycles.

In developed countries, paratransit is often used for demand-responsive systems, such as shared-ride taxis, dial-a-ride cars, and subscription or community buses. When it was introduced in the 1970s, paratransit was thought to be an ideal public transport service provision for users in areas of low-density land use and low demand (that is, areas not served cost-effectively by conventional public transport systems). Recently, it has been commonly used as a public transport system for people with special needs, such as travelers with various disabilities.

This service includes the U.S. Americans with Disabilities Act (ADA) paratransit system, a service required by the U.S. federal government after the 1990 passage of the act (only people who have been certified by the Regional Transportation Authority as a person with a disability are eligible to ride this service), and Call-n-Ride, a service that is similar to dial-a-ride, except that everyone is eligible and passengers can reserve a trip only one hour in advance.

A motorbike delivers milk and goods outside the city of New Delhi, India. Over half of all public transport needs are fulfilled by paratransit services in large cities in developing countries.

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In developing countries, paratransit is often used as the backbone of the public transport system. The lower standard of living, higher population density, and availability of a cheap labor force have together provided a bewildering array of transport modes bridging the gap between a fixed public transport system and private automobiles. More than half of the public transport demands in major cities in developing countries are served by paratransit, comprised of formally and informally operated minibuses, vans, taxis, station wagons, three-wheelers, motorcycles, and, in some cases, informally operated buses.

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