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Demand Responsive Transit (DRT) services are flexible public transportation services in which the routing and the schedule of vehicles operating are defined according to the available demand. Transit agencies are further incentivized to provide such a service because provision of ADA complementary paratransit service is a prerequisite for transit agencies to be eligible for federal funding. DRT service is expensive to operate, so it is important to understand the factors that affect these costs and to be able to predict the effect of changes in demand and service alignment on total agency costs. This paper develops analytical formulation to explain the relation between agency cost and zoning strategies using a general cost model for DRT systems which depends on the required number of vehicles, the total vehicle hours operated, and the total vehicle miles traveled in order to serve the demand. The two main objective of this study is to understand when a service area is needed to be divided into smaller regions and how the split should be done in order to be cost effective. Different geometric structures to split a service area into two regions and the total agency cost formulation of each case are investigated. For each geometric structure, two different logics are adopted for splitting the demand between regions. Eventually, the result of splitting the area into each geometric structure is provided for each logic for the case study of New Jersey. The models and methods presented in this paper may be applied to many similar DRT services around the world.
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