On-demand transportation is a mobility service that adapts to the passengers, including the route, location of picking-up and dropping-off, and time. In general, an area with less travel demand is highly suitable for its operation as it moves according to the request only, unlike the typical public transit that operates within a fixed route leading to an inefficient operation and environmental burden. Although the system introduction seems appealing, the operation possibly encounters technical or organizational problems. Therefore, detailed consideration of system operation is mandatory for stakeholders to maintain operation sustainability while simultaneously satisfying the passengers. In this paper, the authors aimed to highlight various challenges of the service and the implemented technologies in the demand-responsive transportation (DRT) system. A systematic literature review with the help of mapping studies was conducted to give broader insights into these research questions: What problems does the already-existing DRT system have and how do researchers propose the solution? What are the main technologies used within the DRT services? What are the possible improvements or innovations for the system? The study will collect and evaluate related papers from the Scopus database to answer the research questions. With the presented information, the paper simultaneously aims to provide insight for other stakeholders on DRT systems for policy consideration and present literature for researchers in this field. In relation to the development opportunities, the study revealed that the integration of DRT systems with micro-mobility services such as bike-sharing and scooters, integration between existing transport services, and autonomous vehicles may elevate the current DRT system.