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Student Transportation Company Enters Ride Share Market

Even as a growing number of student transporters view local ride share services as competition, one of the largest school bus contractors is taking the approach that if you can’t beat them join them, and in the process potentially take them nationwide.

That’s the vision of Student Transportation Inc. in announcing a “highly strategic” move on Tuesday. The company’s Managed Services Group (MSG) made a minority investment in HopSkipDrive, which was started several years ago in California by three mothers as a family- and school-friendly alternative to the likes of Lyft and Uber.

Financial terms were not disclosed. But Thomas Kominsky, STI’s chief growth officer, said MSG is the leading investor in the $7.5 million recently raised for HopSkipDrive.

He called the development disruptive and a good fit with MSG’s core competencies and “technology-forward” services-based strategy. Kominsky explained that MSG is the non-asset arm of STI focused on technology, safety, training, vehicle maintenance, and driver recruitment solutions. The group’s vision is to increase the number of students who need rides to and from school or related events, but for whom the yellow school bus is not an option.

“HopSkipDrive fits perfectly into our technology-forward, services-based strategy of serving an organization’s diverse transportation needs,” Kominsky explained. “We both take significant pride in delivering high levels of customer service while providing the safest, most reliable transportation.”

He added that MSG has strong business ties in areas around the country that HopSkipDrive wants to expand into, such as New York City, Boston, Chicago, Seattle, and Denver. Currently, HopSkipDrive is available in the San Francisco Bay and metropolitan Los Angeles areas.

“HopSkipDrive is thrilled to partner with STI, a company whose reputation for transporting K-12 students to and from schools safely and dependably every day is bar none,” added Joanna McFarland, CEO of HopSkipDrive. “We help get thousands of kids to and from school and have partnered with hundreds of schools to offer innovative rideshare and carpool solutions. STI transports 1.25 million children to and from school every day and their investment and partnership is a great validation of not only our service but also our commitment to safety.”

In addition to individual rides, HopSkipDrive offers group transportation for sports teams and field trips, carpooling to schools and even a “ShuttlePass” that is advertised as a “modern school bus” with daily, predetermined routes. ShuttlePass is available for a flat fee on a monthly, semester or annual basis.

HopSkipDrive puts “CareDriver” applicants through a 15-point certification process, which includes driver record verification, criminal background checks and fingerprinting, vehicle inspection, and at least five years of child-care experience.

The company’s approach to verifying driver and vehicle safety comes at a time when some competitors are encountering challenges in ensuring compliance. For example, Uber was recently ordered to pay an $8.9 million fine to the Colorado Public Utilities Commission for contracting with about 60 drivers who had disqualifying criminal or motor vehicle offenses on their records, including invalid driver’s licenses.

HopSkipDrive’s website said it provides insurance coverage that exceeds regulatory requirements, and it holds a permit from the California Public Utilities Commission.

The company also said it monitors all rides and drivers in real-time, allowing parents to do the same via an app that also allows for trip requests. MSG and STI already have app experience with SafeStop that provides real-time school bus arrival times and student tracking. Kominsky told STN that MSG sees long-term growth opportunities emerging from further development of both app technologies.

STI also announced that Chairman and CEO Denis Gallagher joined HopSkipDrive’s board of directors along with the likes of Greg Steiner, a consumer internet executive with dating site eHarmony.

“This is a very unique situation where a strategic player such as STI has now partnered with an industry disruptor, HopSkipDrive, which is backed by some of the most innovative technology-focused venture capital firms that have successful track records of building new businesses,” Gallagher added. “Together, we are excited to create an improved industry model that meets the standards parents and schools are seeking for safe, secure and reliable transportation for their children.”

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