Internet-based transit services have the potential to enable fully connected, safe, reliable, efficient, and flexible service in the public transit system. The flexible transit system (FTS) allows passengers to make individual travel requests and receive customized door-to-door service by specifying their origins and destinations (OD), departure time range, and willingness to pay (WTP). Unlike the uniform and stable WTP in our previous paper , we consider an exponential decay function for the

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... al pickup locations of passengers, and we proposed a joint design of two-level bus stops in temporal and spatial variations of travel demands. To ensure practical applications of this real-time FTS model, we combine the traversing method and the improved tabu search algorithm. A numerical example from Guangzhou is conducted to demonstrate the applicability of the proposed model and its effectiveness in reducing system cost. INDEX TERMS Public transit, flexible transit system, willingness to pay, real-time response, operational design. MINGYANG PEI received the B.S. degree in transportation engineering from the South China University of Technology, in 2015, and the master's degree, in 2017. She is currently pursuing the Ph.D. degree in transportation engineering with the South China University of Technology, under the supervision of P. Lin. She is also a Visiting Ph.D. Candidate with the University of South Florida, for two-year program, beginning in 2018, under the supervision of X. Li. Her research interests include transportation modeling and computer vision, and transportation of big data analytics. PEIQUN LIN received the B.