# How to Start a Non-Medical Transportation Business in Texas (2027): YES Waiver Rides and City Permits

Canonical URL: https://nemtguide.com/guides/texas-non-medical-transportation/ · Updated 2026-10-06

To start a non-medical transportation business in Texas, form your company, insure each vehicle on a commercial policy, and ask your city about vehicle-for-hire permits. Texas requires no carrier permit for vehicles built for 15 or fewer people, driver included. Paying work comes from the YES waiver, at 55 cents a loaded mile through local mental health authorities and waiver providers, plus area agencies on aging and private riders.

- Of the Texas Medicaid waivers, only YES has a service called non-medical transportation. It pays 55 cents per mile with the rider on board, as of May 2026.
- A transportation-only company cannot become a YES comprehensive waiver provider, which must offer all twelve YES services. You subcontract with one or with a local mental health authority.
- HCS, TxHmL, and CLASS rides are part of services the program provider delivers, so you work through those providers, and CLASS requires its drivers to be the agency's own employees.
- Texas requires no carrier registration for vehicles built for 15 or fewer people, but Dallas, Houston, San Antonio, and Austin each run their own vehicle-for-hire offices.
- A personal auto policy usually does not cover driving for business, and YES subcontractors carry $1 million general liability plus a $1 million umbrella.

Texas pays for non-medical rides through several small doors, not one big program. The narrowest is also the only one with the name: HHSC's waiver comparison chart, revised September 5, 2025, lists a service called non-medical transportation in only one Medicaid waiver, Youth Empowerment Services (YES). The other waivers fold rides into services that program providers deliver, and seniors' rides run through area agencies on aging. This guide covers each door, the permits and insurance a Texas ride company needs, and the order to do things in.

Rides to doctors, dialysis, and pharmacies are a different program. Texas Medicaid members book those through their health plan's ride line, or 877-633-8747 if they have no plan, and the companies that drive them enroll with TMHP and contract with the plans' ride vendors; see the [Texas NEMT guide](https://nemtguide.com/states/texas/) and [Texas NEMT provider enrollment](https://nemtguide.com/guides/texas-nemt-provider-enrollment/). For how non-medical work runs in other states, see [how to start a non-medical transportation business](https://nemtguide.com/guides/non-medical-transportation-business/).

## What counts as non-medical transportation in Texas

The HHSC chart sorts Texas's long-term care waivers by service. Transportation shows up in five of them, under four names:

- **YES (youth 3 through 18 with a serious emotional disturbance):** non-medical transportation, a service of its own, with no set limit; the amount depends on need.
- **HCS:** supported home living transportation.
- **TxHmL:** community support transportation.
- **CLASS and DBMD:** residential habilitation transportation, which the CLASS manual calls transportation-habilitation.

The chart notes that the HCS, TxHmL, CLASS, and DBMD transportation pieces remain waiver services after most of the related care moved to Community First Choice in 2015, and that state plan services must be used first.

YES non-medical transportation takes a youth to waiver services and to community services, activities, and resources in the youth's plan. It is in addition to, and never instead of, Medicaid transportation to medical care (YES Policy Manual, revised April 2026). Family, neighbors, friends, or community agencies who can drive for free come first (HHSC's YES billing guide, May 2026). So a YES ride goes to recreational therapy, out-of-home respite, or a community activity in the youth's plan, not to a pediatrician.

## Permits, insurance, and the 15-passenger line

Texas requires no state carrier permit for a sedan or minivan company. TxDMV requires motor carrier registration, with an intrastate USDOT number, only for a vehicle designed to carry more than 15 passengers, driver included, or rated over 26,000 pounds. The [Texas NEMT guide](https://nemtguide.com/states/texas/) covers those larger-vehicle steps and fees.

### City vehicle-for-hire permits

Cities fill the gap, and each sets its own reach:

- **Dallas.** Chapter 47A defines transportation-for-hire service as the business of carrying people for compensation, and bars anyone from running one inside the city without operating authority (Sec. 47A-2.1.1). The [Dallas permit page](https://nemtguide.com/states/texas/dallas/) walks through the company, vehicle, and driver permits.
- **Houston.** The Administration and Regulatory Affairs Department licenses taxicabs, limousines, private school vehicles, scheduled ground transportation, charter and sightseeing vehicles, pedicabs, and low-speed shuttles under Chapter 46. Its permit list also has a wheelchair accessible vehicle (WAV) class. As of October 2026, a WAV vehicle permit costs $255.96 a year plus a $33.10 administrative fee and needs an inspection and a contract with a permitted vehicle-for-hire company before it is issued, and each WAV driver needs a $12.86 city license (Secs. 46-546 and 46-547). Ask the office at 832-394-8803 which class, if any, covers your vans before you run paid trips in the city.
- **San Antonio.** Chapter 33, Article I (effective November 21, 2022), defines a vehicle for hire as every chauffeured vehicle carrying passengers over city streets for any fare, vans and mini-buses included. Its exclusions name no medical or waiver service. The police department's Ground Transportation Unit enforces Chapter 33 and answers at 210-207-7378.
- **Austin.** The Transportation and Public Works Department permits ground transportation companies, and its provider list (updated July 23, 2026) includes limousine, taxicab, and charter van companies. Call 3-1-1 and ask whether your service needs operating authority.

Texas's rideshare law does not shield a van company from these rules. Occupations Code chapter 2402 bars cities from regulating transportation network companies, but it defines one as a company connecting passengers with drivers in personal vehicles exclusively through a digital network, and it excludes car services arranged any other way (sections 2402.001 and 2402.003).

### Insurance for paid rides

Texas law sets a floor of $30,000 per person, $60,000 per accident, and $25,000 for property damage (Transportation Code 601.072). That floor is not enough on its own. The Texas Department of Insurance's auto guide, updated December 11, 2025, says most personal policies do not cover accidents while you drive for business, so each vehicle needs a business auto policy.

YES work adds its own minimums. HHSC's open enrollment for comprehensive waiver providers requires the provider and its subcontractors to carry commercial general liability of $1,000,000 per occurrence and $3,000,000 aggregate, plus $1,000,000 in umbrella or excess coverage. For what other payers ask, see [NEMT insurance requirements](https://nemtguide.com/guides/nemt-insurance-requirements/).

## YES waiver rides: who you contract with and what they pay

Local mental health authorities (LMHAs) and local behavioral health authorities (LBHAs) run each youth's wraparound planning. Services reach the youth through the LMHA or LBHA or through a comprehensive waiver provider (CWP), and each must build a network of direct service providers. That network is where a ride company fits. Under section 6200 of the YES Policy Manual, each network must offer a choice among qualified providers for every YES service, within 30 miles of the youth's home (75 miles in rural areas), and start authorized services within 10 business days.

### Two ways in

1. **Contract with an LMHA or LBHA.** HHSC's YES provider page, as of October 2026, says individual providers contract directly with their local authority, and each one has its own contracting and onboarding process with required trainings. Call the authority for your county and ask for the YES Program Manager.
2. **Subcontract with a CWP.** CWPs contract with HHSC through open enrollment HHS0011235, which Addendum 4 (August 20, 2026) keeps open until August 31, 2027. A CWP that subcontracts must put a prompt payment clause in the agreement.

Becoming a CWP yourself is out of reach for a ride-only company. A CWP must offer all twelve YES services, from respite and family supports to art and music therapy, have two years of relevant experience, and keep a physical Texas business address that is not the applicant's primary residence. Every person and subcontractor who will deliver its services must finish the YES 101 and Wraparound Overview trainings before the CWP applies.

### What YES rides pay

As of HHSC's May 2026 billing guide (Appendix E), a unit of non-medical transportation is one mile, and it pays $0.55. The rules:

- **Loaded miles only.** Miles before you pick the youth up and after you drop them off cannot be billed.
- **Rounding.** Mileage rounds to the nearest whole mile: .01 to .49 rounds down, and .50 to .99 rounds up.
- **One note a day.** The state's billing system takes one transportation note per youth per day, so every trip that day, by every provider, goes on a single note.
- **No double pay.** A ride cannot be billed during community living supports, paraprofessional services, family support, supported employment, or employment assistance. The first three can already include transportation in their rates.
- **Who gets paid.** HHSC pays the full per-mile rate to the LMHA, LBHA, or CWP under procedure code T2003 with modifier HA, through TMHP. The LMHA, LBHA, or CWP negotiates what it pays you.

For a sense of scale: a youth riding 12 miles each way to a weekly recreational therapy session is 24 billable miles, or $13.20 a week at the state rate, before the contractor sets your share. Price YES work as one piece of a route, not a whole business.

### Driver rules for YES rides

Section 7000.6 of the YES Policy Manual (revised April 2026) requires each person who provides the rides to:

- Be over 18.
- Hold a valid Texas driver's license and insurance on the vehicle used.
- Be on the waiver provider's staff or be a direct service provider subcontracted with it.
- Pass the criminal history and registry checks in section 3100.

Those checks run before work starts: a criminal history check every year, with FBI fingerprints if the person lived outside Texas in the past two years, the Nurse Aide Registry and Employee Misconduct Registry every year, and the federal exclusion list (LEIE) every month. A finding of abuse, neglect, exploitation, or misappropriation bars the person. A youth's legally authorized representative cannot be paid for the rides, but another relative who meets every qualification can.

Each ride goes in a transportation log with the youth's name and Medicaid or state behavioral health ID number, the date, start and stop times, the need in the wraparound plan the ride serves, the start and end places and addresses, miles each way, page and running totals, and the driver's name, signature, and credentials. HHSC posts a sample log on its YES resources site. For how waiver rides work in other states, see [how to become a waiver transportation provider](https://nemtguide.com/guides/waiver-transportation-provider/).

## HCS, TxHmL, and CLASS rides run through program providers

In these waivers the program provider or agency delivers the ride, so you do not enroll for it on your own:

- **HCS.** Supported home living includes providing and securing transportation (26 TAC 565.11). The program provider must have policies that let only staff members and service providers with a valid driver's license and insurance transport anyone (26 TAC 565.9(c), effective June 21, 2023). The same rule expects some supported home living workers to be employed by a program provider's contractor, and makes the program provider hold that contractor to the state's personal attendant rules (26 TAC 565.9(b)(2) and (d)).
- **TxHmL.** Community support transportation remains a TxHmL-only waiver service, used after Community First Choice services (HHSC chart, September 5, 2025).
- **CLASS.** Transportation-habilitation workers must be employed by the direct services agency, hold a current Texas driver's license, keep vehicle liability insurance under state law, and finish hands-on CPR and choking prevention training before they start (CLASS Provider Manual sections 3121.1 and 3124). A ride company cannot fill that role as an outside vendor.

The practical step is a call to HCS and TxHmL program providers near you to ask whether they contract out rides.

## Seniors, Medicare Advantage, and private riders

Three more doors open without a waiver:

- **Area agencies on aging.** HHSC's directory lists 28 area agencies on aging in Texas, and its aging page gives 800-252-9240 for their services. The Older Americans Act funds rides an agency provides with local transportation providers (42 U.S.C. 3030d(a)(2)). [Area agency on aging transportation](https://nemtguide.com/guides/area-agency-on-aging-transportation/) covers how agencies buy rides and what their contracts require.
- **Medicare Advantage plans.** Some plans add rides to their benefits and buy them through a broker. See [Medicare Advantage transportation](https://nemtguide.com/guides/medicare-advantage-transportation/).
- **Private pay.** Families pay for errands, outings, and trips no program covers. See [private pay NEMT](https://nemtguide.com/guides/private-pay-nemt/) for pricing and payment terms.

## How to start a non-medical transportation business in Texas, step by step

1. **Form the company and get an EIN.** See [LLC for NEMT](https://nemtguide.com/guides/llc-for-nemt/).
2. **Choose your first payers.** YES rides, HCS and TxHmL providers, the area agency on aging, and private riders each need their own agreement.
3. **Call your city's vehicle-for-hire office** before the first paid trip: Dallas, Houston, San Antonio, Austin, or wherever you pick riders up.
4. **Insure every vehicle** on a business auto policy, and add general liability and umbrella coverage if you plan YES work.
5. **Hire and screen drivers** with valid Texas licenses, and run the criminal history and registry checks before anyone drives a YES youth.
6. **Call the YES Program Manager** at your LMHA or LBHA, and contact CWPs that serve your counties about subcontracting.
7. **Finish the trainings** your contract names, such as the YES 101 and Wraparound Overview courses HHSC requires of CWP staff and subcontractors.
8. **Keep a transportation log** for every ride, with loaded miles and times, so the contractor can bill and pay you.

## Frequently asked questions

### Do I need a license to start a non-medical transportation business in Texas?

Not from the state, if your vehicles are built for 15 or fewer people, driver included. TxDMV registration and an intrastate USDOT number apply only above that size or above 26,000 pounds. Cities are different: Dallas requires operating authority and vehicle and driver permits, and Houston, San Antonio, and Austin license vehicles for hire through their own offices.

### How much does Texas pay for non-medical transportation?

The YES waiver pays 55 cents per mile, as of HHSC's May 2026 billing guide. Only miles driven with the youth on board count, rounded to the nearest whole mile. HHSC pays that rate to the local mental health authority or comprehensive waiver provider, which negotiates what it pays its employees and subcontractors.

### Can my company become a YES waiver provider just for transportation?

Not as a comprehensive waiver provider. HHSC's open enrollment, accepting applications through August 31, 2027, requires each one to offer all twelve YES services, have two years of relevant experience, and keep a physical Texas address that is not the applicant's primary residence. A ride company subcontracts with a comprehensive waiver provider or contracts with a local mental health authority instead.

### Can a non-medical transportation company take Medicaid rides to doctor appointments?

Only through Texas Medicaid's medical transportation program, which is separate. YES non-medical transportation is in addition to, not instead of, Medicaid rides to medical care. For doctor and dialysis trips, you enroll with TMHP and contract with the health plans' ride vendors, as the Texas NEMT guide explains.

### What do drivers need for YES waiver rides?

Under the YES Policy Manual (revised April 2026), a driver must be over 18, hold a valid Texas driver's license and insurance for the vehicle, work for or subcontract with a waiver provider, and pass a criminal history check. Registry checks repeat every year, and the federal exclusion list is checked monthly.

### What insurance does a non-medical transportation company need in Texas?

Every vehicle needs at least $30,000 per person, $60,000 per accident, and $25,000 property damage under Transportation Code 601.072, on a policy that covers business use. YES comprehensive waiver providers and their subcontractors must carry $1 million per occurrence and $3 million aggregate general liability, plus a $1 million umbrella. Cities with vehicle-for-hire permits set their own minimums.

## Official resources

- [Texas HHSC: YES waiver providers](https://www.hhs.texas.gov/providers/behavioral-health-services-providers-programs/youth-empowerment-services-waiver-providers)
- [Texas HHSC: YES Comprehensive Waiver Provider open enrollment HHS0011235](https://resources.hhs.texas.gov/open-enrollment/hhs0011235)
- [Texas HHSC: YES Waiver billing guide (Appendix E)](https://www.hhs.texas.gov/sites/default/files/documents/doing-business-with-hhs/provider-portal/behavioral-health-provider/yes/appendix-e-yes-waiver-billing-guidelines.pdf)
- [Texas HHSC: Area Agencies on Aging directory](https://resources.hhs.texas.gov/directories/aaa)
- [TxDMV: Who needs a TxDMV number](https://www.txdmv.gov/motor-carriers/txdmv-number)