It's a bus. It's a train. It's both.

What do you get when you cross a bus with a train? A dual-mode vehicle that has the versatility of a bus, the speed of light rail and fuel economy vastly better than either.
Toyota and its truck-making subsidiary Hino Motors have signed on with Japan Rail Hokkaido to develop the vehicles, which carry 25 people and reportedly burn one-fourth the amount of diesel fuel required by conventional buses. Japan Rail started testing them about 18 months ago, and bringing Toyota aboard could speed up development and commercialization of what may be the mass transit vehicle of the future.
Dual-mode vehicles have four rubber tires for road use and four steel wheels for the rails, and it takes less than 15 seconds to go from road to rail and back again. It drives just like a bus on the road, and a hydraulic system raises the tires and lowers the steel wheels as the driver guides the vehicle onto the tracks.
Japan Rail provides rail service for the island of Hokkaido, and about one-third of its lines carry less than 500 people. It developed the dual-mode vehicles as a means of cutting costs on those lines without reducing service. The vehicles use a Toyota microbus body and axles built by Hino. The two companies will help Japan Rail refine the technology and increase passenger capacity with an eye toward commercial production.
"Our contribution is expected to be another step toward more practical use of the dual mode vehicle," company spokesman Kenichiro Baba told AFP.
Combing the versatility of a bus with the speed of a train has allowed Japan Rail to tailor routes and services to the communities it serves. Rather than scuttling service on under-utilized lines, Japan Rail has simply switched to smaller vehicles.
Dual-mode vehicles would be a great addition to America's mass transit infrastructure. It would make rail transit feasible in those areas that don't have the population density to support a lot of stations, and make mass transit a more viable option for exurbs. Riders could simply hop on at a bus stop in their neighborhood, then ride the rails to their destination.

Wired.