Transportation Network Companies Invest In Electric (School Bus) Future

September 28, 2021

A Zum Services school bus. Image courtesy of Zūm

With the new academic year underway, the world continues to fight an urgent battle to temper climate change and elevate public health. In the U.S., historic wildfires continue to burn along the West Coast. Communities in southern and Midwestern states are still recovering from storms that submerged roads and damaged buildings.

The summer of 2021 also marked breakthroughs in money-backed public policy to reshape transportation and eliminate fossil fuel-burning vehicles, which are viewed as the world’s largest source of harmful greenhouse gases. With new public and private investments available for electric vehicles, transportation network companies (TNCs), otherwise known as rideshare, are taking the opportunity to grow their business and business models by electrifying their fleets in the education space.

EV Evolution in California School Districts

California school districts in the San Francisco Bay area have found a way to modernize their student transportation around the goals of environmental sustainability, operational efficiency and data transparency. In the process, they are also building a new kind of student transportation model centered on all-electric vehicle fleets and mobile applications spawned from California-based rideshare innovators.

“We set out to transform student transportation, an industry that has remained unchanged for 80 years. Electric is inevitable, as driven by mandate,” said Zūm Chief Executive Officer Ritu Narayan, who founded the student rideshare startup along with her two brothers in 2015 to address her own challenges in finding rides for her children. “Schools have to look at it as a blueprint in a bigger picture of what electric vehicles can provide in the future.”

Zūm has accelerated its business model from a mobile app for parents to a full-service transportation provider for school districts. The company is investing in its own electrification programs (i.e., Zūm Net Zero) as a way to satisfy mandates and offer all-electric student transportation services for its current San Francisco Bay area customers and future customers elsewhere.

In March, the California Air Resources Board released its Clean Miles Standard for TNCs like Zūm. The standard goes into effect next year, with TNCs required to start transitioning their fleets to electric beginning in 2023. At least 90 percent compliance is required by 2030. A Zūm spokesman told School Transportation News that the company’s goal is to be all electric by 2025.

In related news, Zūm announced its partnership over the summer with energy management and distribution software company AutoGrid to turn its future electric vehicles (Zūm says as many as 10,000 school buses) into a large virtual power plant. Electric vehicles can be creatively repurposed through bidirectional charging, which involves an exchange of energy that can be stored for emergencies, leveraged for time-of-use savings, or monetized by selling excess energy back to the grid. Through a combination of software and energy-use analytics, Zūm would be able to detect optimal times for when to take power from the electric grid or when to give it back.

Over the past year, Zūm contracted with school districts in Oakland and San Francisco to operate the bulk of student transportation. Zūm provides a technology platform for efficient routing and real-time ridership updates through a mobile app for families. While now operating a mix of diesel and alternative fuel school buses, Zūm plans to provide both districts with new fleets of electric school buses, vans and cars by 2025.

In July, the San Francisco Unified School District (SFUSD) awarded Zūm a five-year $150 million contract to transport more than 3,500 students across 150 school campuses starting this school year. Additionally, Zūm will perform over 2,000 field trips. Zūm’s technology platform focuses on optimizing transportation routes in real time, which the company stated will help the district save an average of over $3 million a year.

Zūm reported that it rolled out its software applications and trained drivers ahead of the mid-August school start. Out of the 206 vehicles in today’s fleet, about 10 percent are electric vehicles. The rest are gasoline and diesel school buses. SFUSD informed students, families and the public about the new transportation processes and the mobile app, as well as how to slow the spread of COVID-19 through back-to-school health precautions.

“A major challenge we experienced in the past was gaining visibility into the location of students and buses across the district,” said Orla O’Keefe, chief of policy and operations at San Francisco Unified.

“It’s our hope that Zūm’s innovative approach to student transportation will provide a comprehensive solution that offers enhanced safety and care, driver efficiencies, and visibility into day-to-day operations.”

Zūm entered its contract with the Oakland Unified School District last year just as classes went online in response to the COVID-19 pandemic. Its routing technology and buses helped deliver district-made meals, computers and supplies to homes where students were unable to pick up meals from the school sites. This academic year, Zūm and the district are running flexible operations as students return to in-person learning with masks and the possibilities that the ever- morphing virus could disrupt routines again. And they are plotting an all-electric vehicle future for the district by 2025, as well.

“There needs to be a new shift in how we do school transportation, and I think that Zūm has stepped up to do the hybrid model with electric school buses and smaller vehicles,” said Kimberly Raney, Oakland Unified’s director of procurement, warehouse and transportation business operations. “We recognize that we have to individualize transportation the best we can while keeping it standardized.”

Other Ways TNCs Are Electrifying

Transportation network companies have other hurdles to overcome, as California targets ridesharing services for increased environmental protection regulation. The California Public Utilities Commission (CPUC) reported that the TNCs it regulates are the fastest growing sector in the state’s commercial passenger vehicle fleets.

CPUC is asking companies to work with their drivers to adopt electric and zero-emission vehicles for their rideshare services by 2030. Some companies in the school transportation niche are still mapping out how that will take shape in their driver communities.

In August, TNC HopSkipDrive announced that it raised $25 million in investment funding from Energy Impact Partners, Keyframe Capital, FirstMark Capital, and 1776 Ventures. The company will use the funding for vehicle electrification projects and expansion into 30 new markets.

Among HopSkipDrive’s “CareDriver” vehicles, 19 percent are currently categorized as hybrid or electric powered. Over the next few years, the company reported that it will expand with transportation providers that offer electric vans and buses, as well as helping thousands of contracted CareDrivers transition to electric vehicles.

Kango first partnered in 2017 with vehicle manufacturer Stellantis (formerly Fiat Chrysler
Automobiles) to provide its eligible rideshare drivers with access to plug-in Pacifica hybrid
minivans. Now emerging from the pandemic, the company is evaluating what approach to fleet electrification makes the most sense for its business, drivers and the environment, Kango CEO Sara Schaer said.

ALC Schools is not classified as a TNC because it is not an on-demand service, so it is exempted from electrification requirements for rideshare, explained Megan Carey, the company’s chief development officer. Currently, hybrid vehicles are a small portion of the fleet available fleet to ALC. Yet Carey said the company continues to monitor the trend of electrifying fleets. Its national team manages regulations, requirements and guidelines as well as requests of district partners, she added.