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The innovative on-demand bus system is developed and the result of field tests shows that the system is valid for different city types. On-demand is a demand-responsive transit service where the vehicles transport users after they reserve their seats, and the vehicle does not move if there is no reservation. On-demand bus is an existing technology and it runs all over the world, but the high running cost is a problem. The aim of the developed system is practical introduction of the system from cost viewpoint. Local government can start the service in low cost with cloud computing technology. In order to build up the cloud computing system, schedule calculation system and the communication device in the car are required. In order to validate the developed system, simulation and field test are held. The result of computer simulation shows that the developed calculation algorithm works well as designed. The result of field test shows that the on-demand bus service in three different type cities are provided through the Internet with cloud computing technology and it is evaluated to enable new public transportation system.