With the increased population of the elderly, providing more active public transportation for an older population is a global issue. This study investigates the travel behaviour and mode choice attitudes of people aged 65 and older and improves transport accessibility by proposing a demand responsive transport (DRT) service in New Zealand (NZ) rural areas and small towns. A case study was conducted at the Thames, Waikato to investigate the travel behaviour of the elderly and explore the presence of heterogeneity in transport mode choice. Thames is located at the Thames-Coromandel District with a high proportion (27.1%) of people aged 65 and older. Due to the popularity of Thames for people aged 65 and over, the population of this age group in Thames is increasing and predicted to increase to 43% in the year 2043. Therefore, the demand for alternative modes of transport, especially once owning or driving a private motor vehicle is no longer a viable option. This study explores the existing problems that the elderly face regarding transportation in Thames and investigates possible public transport improvements to help keep the people aged 65 and over able to travel locally within Thames. To achieve the objective of this study, a revealed preference survey was examined for exploring various types of elderly’s travel behaviour and mode choice. A rank-ordered logit model was adopted using data analysis on the choices of individuals over various mode choice options and the critical components of effective DRT service implementation for older people in NZ rural areas and small cities. The results show that as age increases the number of people using their vehicles for transport around Thames decreases and reliance on family or friends. This travel behaviour is especially the case in the major areas of Thames further away from the Thames CBD and shops where walking, cycling or mobility scooters are not a viable option due to long walking distance and need to carry groceries. The destinations that the elderly visit dictates to some extent the type of transport chosen. For example, from the results revealed that the majority of elderly make weekly trips for shopping but modes of transport such as the bus, walking, cycling and mobility scooters are not favourable for shopping in all cases due to the limit on weight, size and quantity that can be physically carried using these transport options. The results are also supporting a DRT service in NZ rural areas and small towns. For further research into a DRT service is justified where the elderly life also restricts the mode of transport used due to travel distance and topography.