A method of dynamically allocating frequency settings of a transit service includes utilizing AVL/APC to determine travel time and demand variations within a day. Clusters of time periods are formed based thereon and the day is split up. For each of the time periods for which a new frequency setting will be allocated, frequency allocation ranges are computed within which waiting times at multi-modal transfer stops are reduced and a frequency allocation is selected using criteria including passenger demand coverage and operational costs reduction. A plurality of frequency setting solutions are computed using a Branch and Bound approach with Sequential Quadratic Programming (SQP) or a sequential genetic algorithm with exterior point penalization. Sensitivity of the frequency setting solutions is tested to determine a most operationally reliable frequency setting solution for the new frequency setting and a timetable of the transit service is updated accordingly.