They fill in the gaps where:
- formal transit services run by the city or contracted private operators do not meet the population’s mobility needs (especially in poorer neighborhoods), or
- there are no formal transit systems.
Areas with dense urban cores, low-income households, and crowded streets need efficient public transport services for residents to get to jobs, schools, shopping, medical appointments, and government offices.
If a city lacks fiscal and institutional capacity, its formal public transport services can fail to meet the demands of the marketplace.
Consequently, small-scale operators, legally or illegally, enter the market to fill the gap. They can complement regular transit services, enter neighborhoods poorly served by formal operators, and respond promptly to shifting market demands.