Rural Public Transit Yields a Multitude of Financial and Other Benefits
UTC Study Reveals States May Need to Contribute More to Operations
SEPTEMBER 2025 – Impacts of transit in general and rural transit in particular are not well understood, especially when it comes to attributes such as return on investment (ROI). A robust demand-response public bus transportation system in rural parts of the United States provides communities within each network with significant returns on the investments by way of helping to improve workforce participation, giving better access to healthcare facilities, and bolstering local economies.
The results of recent research revealed that, for every rural transportation dollar provided to system operators by a state, nearly $4 in economic activity is generated within communities served.
These were key findings found in “Return on Investment for Rural Demand-Response Transit in Illinois,” a study completed in July by the Urban Transportation Center, a research unit at the University of Illinois Chicago.
The study concentrated on demand-response transit, which typically operates through pre-scheduled, door-to-door service. This service differs from fixed-route transit services, which are more prevalent in cities and within large metro areas.
To launch the study, the research team, led by UTC Director Dr. P.S. Sriraj, conducted an extensive literature review to create a conceptual framework for the benefits accrued by rural transit. With this knowledge, researchers developed a conceptual model to link the various impacts or benefits and costs. That data was translated into a mathematical formulation, which was applied in various case studies from rural Illinois communities.
Customer satisfaction survey data from individual transit systems and census demographic data was used to operationalize the conceptual model. An analysis of the findings was presented in the report.
The researches learned that narrow performance metrics, such as farebox recovery statistics or an account of the number of passengers using demand-response services, did not accurately capture future operational savings and revenue generated.
The findings also showed that given some growing uncertainty about the allocation of federal dollars for demand-response rural public transit, state governments may be needed to assume a great financial contribution. This is especially true for transit operations for people with disabilities. As noted in the study, “The federal government covers up to 80% of capital expenses, 50% of operational costs, and 80% of costs for ADA-compliant non-fixed route paratransit services.”
To access the study, “Return on Investment for Rural Demand-Response Transit in Illinois,” please visit this link.
The Urban Transportation Center at UIC is dedicated to conducting research and education and providing technical assistance on urban transportation planning, policy, operations, and management. The UTC is part of the College of Urban Planning and Public Affairs, a nationally recognized innovator in education, research, and engagement in support of the nation’s cities and metropolitan areas. Learn more by visiting https://utc.uic.edu/