Over the past 10 years, operating expenses for demand responsive transit (DRT) have more than doubled as demand for this mandated service has expanded. The DRT systems that we studied consist of dial-a-ride programs that transit agencies use for point-to-point pick-up and delivery of the elderly and handicapped. Many advanced technologies and management practices have been proposed and implemented to improve the efficiency of the service; but, evidence for the effectiveness of these actions has been based upon projections or small pilot studies. We present the results of a nationwide study involving 62 transit agencies. Our analysis indicates that the use of paratransit computer aided dispatching (CAD) system and agency service delivery provide a productivity benefit while the use of financial incentives has a detrimental impact on productivity. Also, the use of advanced communication technology has a beneficial impact on operating cost while the use of financial incentives has a detrimental impact.

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