A study was carried out with the aim of determining the optimum form of public transport for the town of Carterton, Oxfordshire. A demand model was developed and calibrated and was shown to be in close ageement with observations for three different levels of public transport in the town. This model was used to predict the variations of demand with fare and level of service for three different transport systems: fixed route minibus, many-to-many dial-a-bus and taxi. Supply models were developed for each system was optimised according to both commercial and social objectives. It was concluded that none of these systems could be operated at a commercial profit and that only a fixed route minibus service could show a net social benefit.