TL;DR
- Microtransit is public transportation that riders book on demand instead of catching at a fixed stop on a fixed timetable.
- North Carolina went from 2 microtransit services in 2020 to 15 in 2025, and carried 533,266 rides in state fiscal year 2025.
- Some agencies run these services on their own vehicles. Others contract a private operator to provide the vehicles, the drivers, and the dispatching.
- Federal money covers most of it, usually through the Federal Transit Administration.
- The trips look a lot like NEMT work. Door-to-door service was used by 8 of the 15 North Carolina programs.
Most NEMT operators know their Medicaid brokers and their facility accounts. Fewer know that their local transit agency may be looking to pay a private company to move riders in the same service area.
That work is called microtransit, and it has grown quickly in the last five years.
What Microtransit Actually Is
North Carolina’s Department of Transportation defines microtransit as a technology-enabled public transportation system with flexible routing based on real-time trip demand. A rider requests a trip, and the vehicle comes to them instead of running a set loop whether anyone is waiting or not.
It sits between a city bus and a taxi. The bus follows a published route on a published schedule. A taxi goes wherever one rider asks. Microtransit takes requests from many riders in an area and groups them into shared trips, usually inside a defined zone.
The service area can be small or large. Among North Carolina’s programs, the Town of Morrisville covers 10.4 square miles, while Orange County covers 376.1.
How Fast It Is Growing
North Carolina publishes an annual report on its microtransit programs, which makes it one of the easier states to look at.
Those services carried 533,266 rides in state fiscal year 2025.
| Year | Microtransit Services in North Carolina |
|---|---|
| 2020 | 2 |
| 2021 | 4 |
| 2022 | 6 |
| 2023 | 7 |
| 2024 | 11 |
| 2025 | 15 |
North Carolina is one state. The same pattern is showing up elsewhere, particularly in rural areas. Less than 2 percent of all public transportation rides in the United States happen in rural locations, and most of those rides go to work or medical appointments.
Why Some Agencies Contract It Out
A transit agency starting a microtransit service has to decide how much of it to run itself.
That second group is where a private operator comes in. The agency holds the funding and the public accountability. The contractor supplies vehicles, drivers, and the people answering the phone and assigning trips.
For an NEMT operator, the work itself is familiar. Door-to-door service was used in 8 of the 15 North Carolina programs, with curb-to-curb and virtual bus stops used in the others. Those are the same service levels NEMT providers already run, with the same assistance requirements and the same accessible vehicles.
Where the Money Comes From
The program NEMT operators run into most often is Section 5310, which funds transportation for seniors and people with disabilities. Subrecipients can include states, local government authorities, private nonprofit organizations, and operators of public transportation. The federal share of eligible capital costs can go up to 80 percent.
For-profit operators are usually not direct recipients of these grants. They work as contractors to an agency or a nonprofit that holds the award. FTA’s updated program circular addresses private taxi operators and transportation network companies, noting they may be contractors or subrecipients depending on whether the service is exclusive or shared ride.
So the practical route into this work is a contract with the agency, rather than a grant application of your own.
Adding a public contract to your existing routes?
Pac Biz handles call coverage and dispatch for NEMT providers, including the booking volume that comes with a new service area.
What to Check Before You Bid
Microtransit costs more per ride than a fixed bus route. Long trips and driving without passengers push costs above a service that runs short stops on a set schedule, and that gap is wider in rural areas. Any operator pricing this work should assume a high share of empty running.
Five things to confirm before putting in a bid:
- The service area size and how far apart the common trip pairs sit
- Whether the agency expects door-to-door or curb-to-curb, since assistance changes staffing
- Who supplies the booking software, and whether your dispatchers will be working in the agency’s system or your own
- The service hours, including whether phone coverage is required outside them
- How the agency pays, whether by hour, by vehicle, or by completed trip
That last one matters most. Paying by completed trip puts the cost of cancellations and empty miles on the operator. Paying by revenue hour moves it to the agency.
The Short Version
Microtransit contracts put public money behind trips that look a lot like the NEMT work an operator already runs. Growth has been fast enough in some states that agencies are actively looking for contractors.
The place to start is your regional transit agency or planning organization, and their coordinated public transit plan. Projects have to appear in that plan to receive this funding, so the plan will tell you what is being considered in your area before a bid ever goes out.