Vancouver has 20-person minibuses serving suburban routes. They are what make the rest of the transit system work.
I'm told (but have no idea of how true that is, since my social circles don't intersect it) that New York has a cottage industry of private bus-vans, that sit somewhere between a taxi and a vanpool that get people (usually working poor) to and from work.
From some googling it appears a major reason for the community shuttles is that they are allowed to operate on narrower, suburban streets than full sized busses and have lower fuel consumption per mile.
I'll concede geography limits are a valid reason for smaller vehicles.
Dollar vans are real [0]. Real in the same sense as nutcrackers and bodega kitties: endemic, well-loved, and officially discouraged.
[0] https://citylimits.org/how-nyc-dollar-vans-are-adapting-for-...