Quite a few of those items can be eliminated or reduced.

I think people suggesting "build it from scratch" mean build a local Uber-like service from scratch, which like Uber would not own vehicles itself or pay for gas or maintenance. That gets rid of the buying vehicles, and covering gas, maintenance, and tires.

Dispatching drivers could be done with pairs of text messages to the driver, of the form "pick up <NAME> at <ADDRESS>" and "drop off <NAME> at <ADDRESS>". The driver can tap on the addresses in those text messages to open them in the driver's smartphone's map application. That gets rid of the need for a commercial map license.

I don't see any need for a payment back end. The town can require drivers to accept payments directly using one or more specified methods (such as Square).

It probably doesn't need native iOS and Android apps. A web-based application should be sufficient.

They already have a website. They should be able to add the back end stuff to that, so no new costs for ops or hosting. (That is assuming that they have access to the code for their site and can make changes. Their site is run by Pathfive.ca, which seems to be a company that specializes in building and hosting websites for educational institutions and local governments. It may be that the town only supplies content to fill in templates).

You're describing a business model that (in theory) has a massive built-in cost advantage over Uber (whose model sounds bloated and inefficient compared to yours). The start-up costs are lower, the operating costs are lower, the maintenance and keep-up costs of a single Web site are lower.

Why hasn't anybody executed on that strategy (in practice)?

Forget the government affiliation, someone could be minting money either by competing with Uber on cost or just strategically choosing smaller markets that are not yet covered by Uber.

Why aren't they?

> $270,000 annually for one bus

For comparison, in an average German town, a bus costs annually $80'000, including maintenance and driver. From scratch or rented from a company offering bus services.

how does the accounting work out for the driver's health care and retirement pension?

a typical California city must contribute quite a significant sum so that the bus driver can retire at, say, 70% of their highest salary level. (e.g. over the past year, about 20% of Los Angeles's budget went to paying for the retirement of past employees.)

how does Germany do it?

The employer pays 9% of the monthly wage directly into the federal pension insurance, 7% directly into the federal health insurance. Roughly 1.5% into unemployment insurance

The rest is handled by the employee.

Pensions are paid by the employees pension insurance, and the federal pension insurance, not by the employer.

Note that this is different for certain kinds of civil servants (so-called Beamte). A rule-of-thumb for a typical public entity is that about 10% of the budget go to health and pensions of those public servants (but the exact number varies substantially between different entities), with rising numbers.

There was a distant time where some bus drivers were also appointed Beamte but that practice was done away decades ago, so there are only very few such drivers left.

this. There are so many costs to operating a service like this.

The first person you fire in that scenario is the person who thought all of the above was needed to dispatch a small number of cars to pick people up. I'm going to go out on a limb and imagine that that person is the general manager. After that I would fire the ops team, the ios and android devs as the entire solution could be handled a very simple non flashy website running on cheap web hosting.

Sounds like someone somewhere should be able to run with this idea and commercialize it at very competitive costs. Not necessarily to compete with Uber head-to-head (although this sounds appealing), but maybe to help out a smaller town that's not served by Uber or Lyft.

So what are the most successful examples of non flashy websites running on cheap hosting you'd recommend?

What about situating a small number of operators in an existing office with existing phone lines and communicating with a small number of drivers using smart phones?

Do operators' compensation packages, phone bills, office rental, equipment expenses and utility bills add up to an amount above or below $610,000?