Newsflash: School Buses Are Essential

April 29, 2024

The iconic yellow school bus is a mainstay of American culture. We see them in Hollywood movies and TV shows, and you can’t help but notice them as they drive along our roads. School buses play a crucial role in ensuring safe, efficient and community-oriented transportation for students.

At almost 500,000 buses, they are the largest single fleet in North America, beating the U.S. Postal Service fleet of vans and more than twice as large as the entire motor vehicle fleet of FedEx. School buses really are a part of the fabric of our daily lives. Every time I see a school bus, I can’t help but look at the name on the side, and I love seeing new names that I have not seen before. This is a habit that, once you start doing, you can never stop!

School buses are the safest form of transportation for moving students to and from school each day. The National Highway Traffic Safety Administration reports that less than 1 percent of all traffic fatalities involve children on school transportation vehicles. It’s only one of the many reasons STN readers and the wider communities love our school buses.

Recently we’ve seen a lot of interest in school busing from investment firms looking into the school transportation business. The interest extends across different types of investment firms, from venture capital and infrastructure firms to more traditional private equity firms. (Full disclosure: Beacon Mobility is supported by a private equity firm that invests in our growth and provides funding that allows us to continually reinvest in our buses, technology and our drivers.)

But what does this mean? And why are these investment firms so interested in school bus operators? In many ways, it stems from the critical some would say “essential” role we play. For instance, as a part of a sector within private equity, many infrastructure firms specifically target stable assets like power plants, toll roads, bridges, and airports. These are referred to as “core” assets. The common thread is that these assets are very stable, with long-term contracts, and they provide an essential service that is core to the U.S. economy.

The school bus industry shares many of the same characteristics:

Very stable business model: School bus demand does not vary based on how the economy is performing. Kids go to school regardless.

Long-term contracts: Contracts in the school bus industry are typically three to five years in length but are often renewed multiple times; at Beacon Mobility we have a contract in New York that we have operated for 98 years. (From an investor perspective this signals stability; for me, it means I have two years to plan a centennial celebration!)

Essential/core service: With an estimated two-thirds of families having both parents working, school buses provide the ability for children to get to school, while reducing traffic congestion as fewer vehicles are on the road. Our economy would not function without school buses to take our kids to school.

Also, over the long term, the school bus industry is uniquely positioned to help lead our economy’s transition to clean energy. With one of the nation’s largest fleets and public sector interest in electric and other alternative fuel vehicles, these investment firms want to help that transition happen sooner.

As the school bus industry looks to change over the next few years with additional investment in technology and a transition to greener fuel sources, like electricity,
we welcome, in fact, require the additional investment these investment firms provide. It will enable us to address the many changes that are needed to make the industry more environmentally friendly and more technologically advanced.

All of this does not change our underlying goal as an industry to transport kids to school safely and on time. The additional investment just confirms what we have all known for many years … school buses are essential!

Editor’s Note: As reprinted in the April 2024 issue of School Transportation News.

Judith Crawford is CEO of student transportation operator Beacon Mobility. Previously, she was CEO of National Express Transit and prior to that was CFO of National Express U.S.