What started out as a campus circuit 17 months ago, became the "city loop" service in November.
Both services failed as they did not attract "sustainable" passenger numbers.
Otago Regional Council policy and resource planning director Fraser McRae said the "city loop" was the council's second attempt at providing what was thought would be "a useful and popular service", but it attracted an average of less than one person per trip and at its peak, just over one person per trip.
"The red bus city loop offered frequent services but has been so poorly patronised it is not economical to continue."
The 17-month trial cost $405,000 and was funded by the council and the New Zealand Transport Agency.
The council first trialled a campus circuit, which ran down George St, around the botanic garden, to Forth St and St Andrews St, but it only attracted average passengers numbers per trip of 1.97 over a seven-month period.
Late last year, councillors decided instead of terminating the service and saving $100,000, it would amend the route to a "city loop", running from Albany St to the Edgar Centre, via Ward St and Portsmouth Dr, taking in South Dunedin shops, the University of Otago park and ride area, and the hospital.
Cr Michael Deaker said both services had been provided in the hope it would be "useful for campus folks" and research had shown there was potential support for a "city loop".
The message the council had to take from the failure of both services was "students do not use buses", except for those coming in from outlying suburbs, Cr Deaker said.
"They are good bus users."
Many bus services went through the campus or the city so, possibly, the next step to investigate was a "bus centre" around Albany St, Cr Deaker said.
From July 1, changes were being made to bus services in Wakari, Helensburgh, Roslyn and Maori Hill.
Mr McRae said new day routes would give more direct services to the university and the Octagon and some increase in frequency.
The Maori Hill weekday route would be split into two routes, giving better coverage for most passengers, especially those travelling from Bradford and Kenmure.
For the evening and weekend services, Roslyn, Wakari, Maori Hill, University route will be replaced by two more direct routes.
One will go straight to Wakari and Helensburgh, and the other will run between Roslyn, Maori Hill and Otago University.
Port Chalmers and Peninsula services will also be improved, with some additional services.
