Such a facility, also called the 'mini bus' service, is already available in other parts of the state.
Chief Minister J Jayalalithaa flagged off the initiative at a function here, besides launching 610 new buses for city roads, insisting her government was committed to delivering transport services at low costs considering that the sector plays a key role in economic growth.
Jayalalithaa also gave pension benefits to 25 retired transport employees and sanctioned Rs 257 crore of pension benefits for other retired department employees.
These included replacing old buses with new ones and upgradation facilities, while the Transport department had earned Rs 28.13 crore from advertisement revenues, she said.
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The government has set aside Rs 1026 crore to buy 6000 new buses and over 3000 of them had been already purchased and in use, she noted.
With the Centre regularly hiking the price of diesel, Rs 500 crore had been allocated to the Transport Department this year to meet its 'financial burden', though it had not been passed on to the passengers, she said.
The scheme was launched in September this year.