Tailored to the needs of its passengers, the Bwcabus service serves rural Carmarthenshire, Ceredigion and Pembrokeshire.
It can be pre-booked allowing people to travel between local towns and villages within the zone or connect to main line bus services.
It operates between 7am and 7pm Monday to Saturday and also has a number of fixed routes that operate on certain days.
See also: Expansion for innoovative bus service
The existing service was recently extended to a number of new towns and villages and a new service launched thanks to a £1.8m grant.
Hazel Evans, Carmarthenshire's executive member for the environment, said the bus service was making a "huge difference" to rural people.
She said: "It really is providing a valuable contribution to rural life, health and the local economy."
Bwcabus is a partnership project and transport service between Carmarthenshire, Ceredigion and Pembrokeshire county councils.
The project is designed to respond to the needs of rural communities and reduce social exclusion by linking residents with services.
It has received funding through the Welsh Government's rural development programme, which is part funded by the European Union.
On-demand bus services are increasingly seen as an effective alternative to conventional supported rural bus services.
They are sometimes seen as a cost-effective way of maintaining a transport service at a time of cutbacks in public expenditure.
Welsh rural affairs secretary Lesley Griffiths said the Welsh Government was pleased to allocate the £1.8m grant to the project.
She said: "I look forward to hearing about the future success and benefits of this project on the people living in these rural communities."
A similar scheme – CallConnect – operates in Lincolnshire.
The service is designed to improve public transport in rural communities and market towns where there is an infrequent conventional bus service.