Management of public transportation systems in the 1980s will be a major challenge for urban areas. Their operating scenarios, financial support, and general feasibility will be severely tested. The present heavy subsidy of transit is not expected to continue. Just as much of the U.S. industry has had to specialize its product offerings in a competitive market place, so will transit systems. This will mean the expansion of paratransit activities and the inclusion of paraprivate transportation options. This paper attempts to assist public transportation officials in thinking through their innovative alternatives and provide the rationale for the alternatives they adopt. How these newer, specialized forms of public tkransportation alternatives are integrated into existing traditional transit operations will be the major managerial and official focus for much of this decade. Those areas that are successful in broadening their concept of public transportation to include these innovations will breathe new life and vitality into their local transportation systems. Those who do not will continue to teeter from one financial crisis to another. Clearly, public transportation officials at all levels need to ask themselves, "What are we trying to do?", and restructure to accomplish these goals. We can no longer continue to use nineteenth-century work rules and early twentieth-century technology as we stumble toward the twenty-first century. (Author)