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This study addresses a capacitated vehicle routing problem with time windows and simultaneous pickup and delivery (VRPTWPD) for scheduling bus-type taxis formerly served by regular buses. The effects of varying the maximum number of passenger seats on service quality and costs are investigated. Taiwan's government has subsidized public transport in order to ensure consistency between service shifts and demands, improve the efficiency of public transport operations, and maintain an ongoing supply of services while reducing the number of scooters and/or private cars on roads to minimize traffic congestion. Ultimately, the intent is to reduce government subsidies further and maintain service quality at reasonable levels. Transit planners have also introduced the Demand Responsive Transit System (DRTS) to connect routes. Particularity in rural areas, local transit planners have replaced buses with taxis to form a bus-type taxi service that increases efficiency. As a consequence, the transit service in low-density or rural areas has not been abandoned. The study acknowledges that optimal routes for successful bus-type taxis services vary by area. Routing and scheduling results will assist route planners' efforts to provide sufficient transit services in rural areas. The study results also suggest that further reductions in government subsidies are possible. [ABSTRACT FROM AUTHOR]