Special Needs Transportation

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 3,600 special needs transportation providers in the US offer transport services to the infirm, elderly, or handicapped. Organizations generally receive funding from a combination of fares, government programs, Medicaid NEMT, and service contracts. The industry excludes firms that focus on school or employee bus transportation for special needs individuals or ambulance services.

Dependence On Government Funding

Special needs transportation providers often rely on multiple sources of government funding, including the Federal Transit Administration (FTA), Medicare, Medicaid, and the Veterans Health Administration.

Specialized Vehicle Requirements

Riders with special needs often require specially-equipped vehicles.

Industry size & Structure

The average special needs transportation provider operates a single location, employs about 22 workers, and generates $1-2 million in annual revenue.

    • The special needs transportation industry consists of about 3,600 firms that employ about 78,000 workers and generate around $5.5 billion annually.
    • The top 50 organizations account for 45% of industry revenue.
    • Most special needs transportation providers operate within a limited geographical market or metropolitan area and may work in conjunction with public transportation systems.
    • Access Services of Los Angeles, CA is one of the largest public operators of paratransit services in the US.
                                  Industry Forecast
                                  Special Needs Transportation Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Jan 5, 2024 - Strong Sales Growth Expected
                                  • Special needs transportation industry sales are forecast to increase at a 9.72% compounded annual rate from 2022 to 2027, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Industry labor costs increased during the first 11 months of 2023 as both industry employment and average wages for nonsupervisory employees increased significantly.
                                  • The average retail price of diesel decreased about 61 cents per gallon for the full year of 2023, according to the US Department of Energy/Energy Information Administration (DOE/EIA). FreightWaves analysts cite an unexpected surge in output from the US oil sector as a key cause of the decrease. US Crude production was about 12.2 million barrels per day (b/d) when 2023 started; it was 13.3 million b/d by the end of the year, according to the DOE/EIA.
                                  • About 96% of transit agencies surveyed by the American Public Transportation Association reported a workforce shortage, and 84% of those reporting a shortage said that it is affecting their ability to provide service. Shortages are most acute at entities serving large, urbanized areas and/or with greater ridership, but reports from across the country indicate that the shortage has forced service reductions regardless of ridership size, service area population, or fleet. Shortages of operators and mechanics are particularly acute.
                                  • Officials at Denver's Regional Transportation District (RTD) continue experimenting to address transportation challenges for people with disabilities. Service innovations include grocery delivery and on-demand rides. The grocery program, which has provided over 2,000 deliveries, saves resources and staff time by reducing the number of round-trip rides to take people to the store. Pandemic-related challenges also continue, however. Demand dropped during the pandemic and 100 drivers were laid off. RTD is struggling with reliability as ridership rebounds. “Runs are getting shut down due to a lack of drivers, and that is really difficult for us and our customers,” acknowledged Paul Hamilton, senior manager of RTD’s paratransit services. He says it has been a “challenge” to meet their on-time goals during peak demand.
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