  Microtransit and other flexible transit fleet services can reduce costs by
incorporating transfers. However, transfers are costly to users if they must
get off a vehicle and wait at a stop for another pickup. A mixed integer linear
programming model (MILP) is proposed to solve pickup and delivery problems with
vehicle-synchronized en-route transfers (PDPSET). The transfer location is
determined by the model and can be located at any candidate node in the network
rather than a static facility defined in advance. The transfer operation is
strictly synchronized between vehicles within a hard time window. A heuristic
algorithm is proposed to solve the problem with an acceptable solution in a
much shorter computation time than commercial software. Two sets of synthetic
numerical experiments are tested: small-scale instances based on a 5x5 grid
network, and large-scale instances of varying network sizes up to 250x250 grids
to test scalability. The results show that adding synchronized en-route
transfers in microtransit can further reduce the total cost by 10% on average
and maximum savings can reach up to 19.6% in our small-scale test instances.
The heuristic on average has an optimality gap less than 1.5% while having a
fraction of the run time and can scale up to 250x250 grids with run times
within 1 minute. Two large-scale examples demonstrate that over 50% of vehicle
routes can be further improved by synchronized en-route transfers and the
maximum savings in vehicle travel distance that can reach up to 20.37% for the
instance with 100 vehicles and 300 requests on a 200x200 network.
