The rapid pace of urbanization in India has intensified the demand for efficient, safe, and inclusive public transport systems. In response, the Bus Rapid Transit System (BRTS) has emerged as a viable solution, especially in Tier-2 cities like Hubli-Dharwad. This study explores the role of artificial intelligence (AI) in enhancing the operational efficiency, commuter satisfaction, and safety of the Hubli-Dharwad BRTS (HDBRTS), Karnataka’s first BRTS initiative. Using a mixed-methods approach that integrates primary data from 200 commuters and secondary data from official and academic sources, the research investigates awareness levels, usage patterns, and perceptions of AI-driven services such as real-time tracking, predictive maintenance, contactless ticketing, and smart surveillance. Statistical tools like Chi-square tests and one-sample t-tests reveal strong commuter agreement on the punctuality, reliability, and service quality of AI-enabled BRTS. However, the study also identifies significant variation in awareness and satisfaction based on socio-economic factors such as income, occupation, and gender. While users highly value punctuality and transparency, areas like AI awareness, safety infrastructure, and network expansion require targeted improvements. The findings suggest that HDBRTS is not only transforming urban mobility but also setting a replicable model for sustainable and intelligent transit in similar urban environments. Strategic investments in public education, route extension, and AI-based system optimization are recommended to strengthen the system’s impact further.