Michigan’s rural transit agencies are being asked to deliver more—with less funding and fewer staff

As Local Bus Operating (LBO) reimbursements decline, agencies are looking for practical ways to maintain service, reach more riders, and stay eligible for funding.

This quick guide breaks down current funding opportunities, shares lessons from MDOT’s rural mobility pilot, and shows how Spare can help make your service more flexible, fundable, and discoverable.

‍

Why funding matters for Michigan’s rural transit agencies

Staff capacity is tight. Riders often don’t know what services are available. And it’s hard to keep up with evolving funding programs and tech requirements—especially when you’re just trying to keep daily operations running.

The good news? Michigan is investing in rural transit visibility and trip planning. Spare helps agencies move in that same direction—by making services easier to plan, manage, and report on. While LBO funding remains a challenge, agencies can still shift toward flexible, data-driven models that align with statewide goals.

‍

Transit funding sources available for Michigan agencies

Transit funding often feels like a maze—but the truth is, there’s a lot out there. You just need the right tools (and partners) to unlock it.

Here are a few of the common funding sources rural agencies across the U.S. explore—though eligibility and availability vary.

Federal funding

• Section 5311: For rural and small urban areas—covers capital, planning, and operations.
• Section 5307: For urbanized areas (pop. 50,000+)—focuses on transit capital and maintenance.
• RAISE and other discretionary grants: Competitive, but flexible. Strong fits for regional innovation.
  
  

State-level support

Michigan’s Department of Transportation (MDOT) is actively supporting rural agencies through programs like the Advancing Rural Mobility initiative, which focuses on improving access to real-time transit data (more on that below). At the same time, the Michigan Public Transit Association is calling on the state to restore full LBO funding to ensure agencies can continue providing essential daily rides to work, school, and medical appointments.

✅ Pro tip: Many funding programs now reward projects that emphasize data transparency, regional coordination, and equity. Spare’s platform supports all three—and helps make your operations more sustainable even when LBO reimbursements are below target.

‍

How Spare supports rural transit funding and on-demand operations

Spare helps agencies build smarter, more fundable transit systems—without adding staffing burden.

• GTFS & GTFS-Flex support: Easily generate and maintain transit data feeds to increase visibility in trip planning tools like Google Maps or the MDOT MaaS platform. Read how our GTFS-Flex Builder makes this possible.
• Dynamic scheduling: Match trips with vehicles in real time—reducing inefficiencies and dispatcher workload.
• Data that tells your story: From shared ride rates to passenger wait times, our reporting tools help you demonstrate impact and cost-effectiveness to funders and boards.
  
  

It’s not just about digitizing operations—it’s about making every trip easier to fund, easier to report on, and easier for riders to access. And when budgets are tight, Spare helps you get more out of what you already have.

‍

Lessons from MDOT’s rural transit data and GTFS-Flex initiative

In 2024, MDOT launched Stage 1 of the Advancing Rural Mobility program, partnering with four rural agencies: Benzie, Charlevoix, Roscommon, and Wexford counties.

These regions face real challenges—persistent poverty, tribal lands, and high transportation insecurity. About 1 in 8 rural Michigan residents experience transportation insecurity, and 6% of households either don’t have a car or don’t have enough vehicles for everyone who needs one. That’s a big deal when it comes to getting to work, school, or medical appointments—especially in communities without fixed-route coverage.

MDOT’s goal? Help these agencies create GTFS/GTFS-Flex data so riders can access trip info in real time. And just as importantly, give agencies the tools and training to keep those data feeds going.

Here’s what Stage 1 is delivering:

✅ GTFS and GTFS-Flex data for four rural transit agencies

✅ Training for agency staff on how to manage and maintain data feeds

✅ A roadmap for statewide rollout as part of MDOT’s MaaS platform vision]

Bottom line: Michigan isn’t just talking about rural mobility—it’s actively building the digital infrastructure to support it. That’s where you come in.

‍

Get help building flexible, fundable transit in Michigan

If you’re exploring new service models, applying for funding, or preparing for the next stage of MDOT’s MaaS rollout—we’re here to help.

Let’s talk about how Spare can help your agency:

• Stay ahead of state and federal funding trends
• Launch or scale your on-demand service
• Stretch LBO dollars further through automation and smarter trip planning
• Make your transit system easier to discover and plan around

👉 Book a call with our team and let’s bring more visibility—and viability—to transit in Michigan.