Fares, costs and subsidies per transit trip have risen much faster than inflation during the past 25 years throughout the United States. At the same time, transit ridership per capita has continued to fall and automobile ownership per capita has continued to rise. As a result, U.S. metropolitan areas are losing their battle against traffic congestion. It is becoming increasingly clear that major changes are needed in the way public transportation services are delivered, financed and managed, particularly in fast-growing suburban areas.The State of Hawaii, with financial support from both the U.S. Departments of Energy and Transportation, pioneered in studies of ways that IVHS-technologies can be used to develop low-cost, door-to-door transportation services. Market research studies found that adding single-trip carpool (aka parataxi) services, for example, to existing transit, paratransit and ridesharing modes, could significantly reduce traffic congestion and other transportation, energy and environmental problems, at a low cost to taxpayers.This paper compares the costs of reducing traffic congestion in U.S. metropolitan areas using traditional transit approaches with the costs of using IVHS-enhanced approaches. It also outlines how IVHS technologies can reduce the costs of meeting the requirements of the Clean Air Act and the Americans with Disabilities Act.