Nowadays, through just a few taps on your smartphone, you can get a ride to your desired destination from your current location. This is because innovation and technological advancements, paired with the widespread ownership of smartphones, have given rise to peer-to-peer centralized taxicab platforms. These app-based platforms match demand (people who need a ride) with suppliers (people with cars), and set prices to facilitate transactions. (Proserpio & Tellis, 2017). Today, the global ridesharing industry has been valued at over $61 billion, with projections that it will grow to $218 billion by 2025 (Curley, 2019).
With major players like Uber and Lyft dominating the market, who have a combined market share of 98% in the US for example, it’s difficult to see the space or need for new entrants (Molla, 2018). But there is one group of riders who are underserved in this market – kids. Namely, kids soliciting ridesharing services, or parents requesting it in order to shuttle their kids to activities. This seems like a convenient way for busy parents to get their kids from A to B, but there is a major problem – it’s simply not allowed. Account holders on Uber and Lyft must be 18 or older and cannot request a ride on the behalf of minors, unless they are accompanied by an adult (Heilweil, 2019). Uber and Lyft simply don’t have the certificates or insurance necessary to allow unaccompanied minors, and don’t want the liability that comes with it (Gibbins, 2018). So how are kids supposed to get where they need to go when their parents are busy?
This is where HopSkipDrive enters the picture. HopSkipDrive is a California based ridesharing taxi cab service, founded by three moms, catered specifically to minors. It was founded in 2014 by three working moms struggling to get their kids where they needed to go. (HopSkipDrive, 2019) With initial funding of $14.1 million, their objective is to make a difference in the lives of kids and parents by providing a safe and dependable way of getting kids where they need to go.
How It Works
On the app, parents can request a ride or preschedule one up to 8 hours in advance. For reoccurring activities like after school sports, parents can save rides and ‘repeat’ them. If kids from many families are all going to the same destination, the app has a carpool feature which will coordinate the pickup of kids from several locations for a discounted price. (HopSkipDrive, 2019)
In addition to servicing families, HopSkipDrive also offer ridesharing services to schools. By working with school districts, they are able to unlock opportunities for substantial business growth (Roof, 2018). Schools can book drivers for field trips or students who require special care, with just a few taps. Furthermore, if a school bus isn’t completely full, it can be a much cheaper option for schools to hire HopSkipDrive services instead. (HopSkipDrive, 2019)
To ensure the safety of kids using the service, HopSkipDrive puts it at the center of everything they do. Drivers are referred to as “CareDrivers”, who double as caregivers. To be a CareDriver, you need to be over 23 years old, have at least five years of childcaring experience, a clean driving record, as well as a car that is no more than 10 years old (HopSkipDrive, 2019). Furthermore, drivers are required to pass a multi-agency background check, which includes fingerprinting, before they are officially registered on the app. HopSkipDrive also allows parents to provide detailed pick-up and drop-off instructions, and CareDrivers will confirm a predetermined ‘codeword’ and date of birth with each kid they pick up. Furthermore, all rides are monitored in real time by the HopSkipDrive team. (HopSkipDrive, 2019)
Efficiency of the Business Model
There is considerable demand from working parents to get their kids to activities efficiently and safely and with little time for preplanning. HopSkipDrive allows parents to organize rides for their kids whenever the need arises. On the other side, drivers are able to use their own cars, and spare time, to earn extra money. HopSkipDrive drivers can earn up to $30/hour, which is about three time more than Uber or Lyft drivers (Gibbins, 2018). Many parents are willing to pay the premium price for a safe service, and it is often cheaper than getting babysitter. There is however less flexibility regarding working hours for drivers on the HopSkipDrive app than on Uber of Lyft. This is because kids are in school all day and for the most part require rides in the early mornings, with requests only picking up again in the afternoon. Furthermore, a large number of rides on the app are prescheduled. (Gibbins, 2018)
There are clear internal rules and regulations in place to ensure the safety of kids, like strict behavioural guidelines as to how drivers are supposed to interact with the kids they are driving (HopSkipDrive, 2019). Unlike Uber of Lyft, HopSkipDrive has certificates and insurance necessary to work with minors, and a $1 million liability coverage (HopSkipDrive, 2019). There are legal measures that drivers must go through, namely drivers in California must register with TrustLine, which is a state database for nannys and babysitters. On the one hand, this restricts the number of potential drivers considerably because many do not fit the requirements, or do not have the time to go through the registration process. On the other hand, it may in fact open up the ridesharing industry to potential drivers who otherwise wouldn’t have considered it. HopSkipDrive drivers are almost all female, and either mothers, babysitter, teachers or so called ‘empty nesters’, who feel safer driving for HopSkipDrive than Uber or Lyft, and enjoy caring for kids (Heilweil, 2019).
This business model of ridesharing for kids has not been met without difficulties. Several similar platforms, like Shuddle and Shepherd, have shut down, despite receiving considerable funding initially. These platforms sited issues stemming from the driver vetting and registration process taking too long, and failing to secure more funding after running into financial difficulties (Heilweil, 2019). In 2017, Uber piloted its own program for teenagers ages 13 to 17, but eventually shut it down after little success. This stemmed mainly from the fact that regular Uber drivers were used, who received no extra training or guidelines as to how teens should be transported (Heilweil, 2019).
The Future Ahead
Building a ridesharing business is already a difficult and expensive thing to do, and adding kids into the mix doesn’t make it any easier. Despite the challenges noted above, the market for kid’s ridesharing is continuing to grow, with HopSkipDrive securing another $7.4 million of funding just last year (Roof, 2018). However, HopSkipDrive is not without competition and Zūm, another ridesharing platform for kids just raised their total funding to $70 million, and is already present in three States (Dickey, 2019).
Due to the somewhat uniform schedules of children, it’s a questionable whether drivers on kids ridesharing platforms will continue to get enough work on the average day. Because of this, it could be essential for these platforms to expand their businesses further than just parents requesting rides. The future of ridesharing for kids could be to sell rides directly to schools, largely replacing traditional school busses, something these platforms have already started exploring (Pinsker, 2018).
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Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3084329
Roof, K., 2018. HopSkipDrive raises another $7.4 million for its Uber for kids business. [Online] Available at: https://techcrunch.com/2017/11/21/hopskipdrive-raises-another-7-4-million-for-its-uber-for-kids-business/