Transit agencies may contract for a portion or all of their operations needs. Smaller, newer transit agencies without historical relationships with unionized labor are more likely to contract all of their service. Larger, older agencies with standing relationships and long histories with unionized labor typically contract only a portion of their labor, if any at all. Reducing the number of union contracts would be politically difficult. <ref>Iseki, Hiroyuki, Amy Ford, and Rachel J. Factor. [http://trb.metapress.com/content/1k55102377427762/ “Contracting Practice in Fixed-Route Transit Service: Case Studies in California.”] 2006.</ref> When contracting out just a portion of services, an agency can choose to contract for labor, [[advertising]], policing, technology services, and maintenance of vehicles, as well as operation of entire lines.
The prevalence of contracting for public transit services has grown since the 1980s with many examples of its success in reducing costs, especially in providing [[cost-effective ADA service]]. About 18 percent of all vehicle hours, including both fixed-route and demand-responsive services, are provided through contracted services.<ref>Kim, Songju and Martin Wachs.[[media:Access_TransitContracts.pdf|“Transit and Contracts: What’s Best for Drivers?”]] 2006.</ref> Demand-responsive services are much more likely than standard bus services to be contracted - at about 66 percent and 6 percent, respectively.<ref>Transportation Research Board. [[media:TRB_ContractingReport.pdf|”Special Report 258: Contracting for Bus and Demand-Responsive Transit Services. A Survey of U.S. Practice and Experience.”]] 2001.</ref>