They have this service in Timaru, New Zealand which is a relatively low density town / city of less than 30,000 people. They use vans / minibusses and use the same software to dynamically plan the best route to pick up the passengers that book via the app (or by phone) and drop them to their destinations in the most efficient way possible. You may have to walk to the end of your street for pickup. If there are ever times when there aren't any passengers the van isn't trundling endlessly around in circles doing nothing but waste fuel. I assume it works best in situations / areas where there aren't that many public transport users and on high volume routes they can retain traditional fixed lines alongside the on-demand solution with people using whichever service works best for them. Timaru ended the last fixed route service early this year and have gone full on-demand only.