Creative ways to fund on-demand public transportation and microtransit in 2025

The success of microtransit as an innovative public transit mode has reached all corners of the U.S.—National Public Radio even visited Wilson, N.C.,, to learn just how their on-demand service has become a big hit. On-demand, tech-enabled transportation can offer efficient point-to-point service where no other transit mode exists, replace fixed routes that aren’t operating efficiently enough to justify their costs and fill first- and last-mile gaps in transit networks.  

As a city official or transit agency leader, you probably know all of this. You may even be planning a microtransit pilot as we speak,but you might not know how to stand up a microtransit deployment yourself—let alone fund it.  

Fortunately, microtransit is eligible for more federal and state funding programs than many think, and it pays to think creatively when approaching funding, especially for city governments, which are often eligible for fewer grant programs than transit agencies or rural communities. To give you some inspiration on where to start, Via has highlighted seven cities across the country who have found innovative ways to build and grow microtransit services. 

1. State railway improvement and emission reduction grant: Silicon Valley Hopper in Cupertino, Calif. 

In 2022, the city of Cupertino won an $8.5 million California Transit and Intercity Rail Capital Program grant to electrify and expand its microtransit service from a grant program typically used to support passenger rail infrastructure improvement projects to reduce greenhouse gas emissions.  

City officials addressed the first- and last-mile use case of microtransit and how the service is serving Caltrain stations. Additionally, by proposing to electrify its entire fleet, the city could demonstrate an immediate impact on emissions beyond improving sustainable transportation access to passenger rail transit. 

2. Formula funds and federal innovation grant: Via to Transit in Seattle, Wash. 

King County Metro launched its successful first- and last-mile microtransit service after winning funding through the Federal Transit Administration’s (FTA) Mobility on Demand Sandbox Program. After proving the concept and expanding the service zones, the agency now uses FTA 5307 formula funds to support the long-term sustainability of the program. 

3. Formula funds and federal innovation grant: RIDE in Wilson, N.C.

In 2020, the city of Wilson partnered with Via to launch the microtransit service RIDE to replace the city’s underperforming fixed-route bus network. Initially, the city funded the service with the same mix of local and rural formula funds (5311) it had used for the fixed-route network. In 2021, the city collaborated with Via to craft a winning proposal to the FTA’s Accelerating Innovative Mobility (AIM) grant, which was used to expand service hours to more effectively meet the needs of second- and third-shift workers. As a recipient of this grant, Wilson became a member of the inaugural class of AIM Incubators, described as “a national network of innovative transit agencies that test new mobility solutions and broadly share the results with industry.” 

4. Formula funds: Valdosta On-Demand in Valdosta, Ga. 

Valdosta On-Demand launched in April 2021 and saw early success with high demand from local residents. The city utilized Coronavirus Aid, Relief and Economic Security Act funds to cover the cost of the initial one-year pilot and then secured FTA 5307 formula funds to support the long-term sustainability of the program.

5. City budget and local grants: Via Jersey City in Jersey City, N.J. 

Jersey City leverages a variety of different funding sources to sustain and expand its popular services. This includes funding from the city budget, as well as competitive public grant programs such as a recent award from the New Jersey Transit NJ-JARC Program, which funds ridesharing services that help residents travel to places of employment. 

6. State EV-focused grant: Richmond Moves in Richmond, Calif. 

Richmond Moves’s goal is to fill gaps in the transportation ecosystem, which has historically lacked intra-city transit options and been challenged by heavily polluted air. To underscore the city’s commitment to sustainability, the fleet includes all plug-in hybrid-electric vehicles, reducing energy consumption.  

The service is funded by the Clean Mobility Options (CMO) Voucher Pilot Program and is part of California Climate Investments, a statewide initiative putting billions of cap-and-trade dollars to work reducing greenhouse gas emissions, strengthening the economy and improving public health and the environment, particularly in disadvantaged communities. CMO is administered by CALSTART, the Shared-Use Mobility Center and the Local Government Commission. 

7. Formula funds and federal innovation grant: Arlington On-Demand in Arlington, Texas 

The city of Arlington initially utilized Job Access and Reverse Commute formula funding to launch and sustain its service and now utilizes FTA 5307 formula funds to pay for its citywide expansion. 

In addition, the city has innovatively expanded its services to capitalize on more funding, launching one of the country’s first on-demand autonomous vehicle services, which was funded by the FTA’s Integrated Mobility Innovation Grant in 2020.