The School Bus Might Be Over
In 2015 I met Joanne McFarland. She is the founder of Hop Skip Drive. She had a vision for where the school bus industry was going. She understood that kids’ and parents’ needs have changed and the school bus is too expensive to provide. I wasn’t convinced it could play outside of places like Los Angeles, a car town. It would take time to break into other cities and be expensive. Eventually, she might get there, but it would take a ton of capital. But she convinced me, so I invested and spent a lot of time talking with Joanna in those early days.
She is a killer CEO. There was another competitor in SF when HSD launched. It was a few men backed with tons of cash. Of course, Joanna was struggling to get that type of cash. The other company eventually falls into an abyss, with the cash down the drain. HSD succeeds, and it is still difficult for Joanna to get the funding from many of the VC firms she should have gotten the right amount of funding from.
It has been an extremely windy road. The cost of busing is high, and the workforce is people over 65, so they are more at risk to Covid. The worker shortage in that industry is overwhelming. Create a new workforce. HSD had already figured out the after-school programs, got kids to school and back, and then realized the local Government needed their help. They could fill a hole in the need to bus kids in underserved communities places, and they didn’t have enough buses to handle it. HSD jumped in for the contract, and low and behold; it has saved the Government money. An excellent private, public partnership.
The Pittsburgh school district is short 400 drivers. One charter school in Delaware is offering parents $700 to take over pickup and dropoff duties. 80% of school districts can’t find enough bus drivers. Student transportation is the largest mass transit system in the US, with nearly 500,000 buses. It’s also incredibly inefficient with many of those buses half full. The bus driver shortage has always been a problem but is now even more of a problem due to Covid. And those drivers aren’t coming back. The training required is extensive, and once drivers complete that training they can make far more money and work far more hours driving a truck, driving for Amazon, etc.
Joanna saw it, but obviously, Covid has accelerated where we are today. Another woman has persevered with not enough funding and too much dilution, including all the earlier investors. This is one of the reasons I have left angel investing.