The year-long trial of what is effectively an Uber-like cross-town shuttle officially launched on Monday.

The service, which is booked via an app, runs each weekday between 6.30am and 9am, and in the afternoon from 3.30pm to 6pm.

Customers can get picked up from a chosen location within an "inner-city suburbs" zone of Merewether, The Junction, Bar Beach, Cooks Hill, The Hill and parts of Hamilton, and travel to one of three "CBD" zones.

The main zone takes in Newcastle, Newcastle West, Newcastle East and a small part of Wickham. The two other zones are Beaumont Street in Hamilton and Broadmeadow train station.

"This service allows people in Newcastle to explore new ways of getting around, I'm sure it will be popular with people planning their way to work or appointments in the city," Newcastle councillor Peta Winney-Baartz said at a launch event on Monday.

"We want to encourage higher levels of public transport patronage and active travel to create a more pedestrian-friendly city centre."

The inclusion of Beaumont Street as one of the travel zones will please those who lamented the loss of public buses along the street when the city's network was redrafted in early 2018.

The Broadmeadow zone could be a handy shortcut for people wanting to catch or return from a Sydney train.

Keolis downer will use three vehicles to run the service - a large wheel-chair accessible van and two smaller vehicles capable of carrying six passengers each.

Keolis Downer general manager Mark Dunlop said on Monday on-demand travel complemented existing public transport routes.

"We see a lot of travel now [where] the main route services provide the heavy lifting," he said. "But there's a lot of travel that occurs that the on-demand solutions [can] best provide.

"It just gives people more flexibility on how they travel."

Keolis Downer, which runs Newcastle's public buses, ferries and trams, operates a similar on-demand service in east Lake Macquarie.

Analysis of that service, which has been growing in popularity since it was launched in 2018, has informed the selection of smaller-sized vehicles for the Newcastle trial.

Users of the Newcastle service will book their trips via the Newcastle Transport on-demand app.

A one-way trip will cost $3.20 and can be paid for with an Opal card, or a debit or credit card.

The on-demand trial is one of a range of initiatives City of Newcastle has launched using a $5 million grant received from the federal government's Smart Cities and Suburbs program in 2017.

One of those, a year-long trial of an autonomous vehicle along Wharf Road, is due to begin later this year.

City of Newcastle also funds the park-and-ride bus service, which Keolis Downer operates from McDonald Jones Stadium at Broadmeadow to the city each weekday morning and return in the afternoon.

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