The juggle of work, school and myriad extracurricular activities is all too familiar to parents like Kelly Aluise of Los Angeles.
Her 12-year-old daughter, Emma, had enrolled in August for after-school surfing and swimming. Ms. Aluise and her ex-husband, who work full time, didn’t know how they would get her to the activities. Complicating matters, Ms. Aluise’s schedule as a real estate agent with Keller Williams is unpredictable.
“I didn’t know how I was going to get Emma where she needed to be and do my job,” she said. “So I asked the school’s principal what I should do and he handed me a brochure for HopSkipDrive.” Ms. Aluise looked at the brochure and hugged him.
She now schedules three rides a week for her daughter, which costs about $45 to $50 a week. While ride-hailing services have been popular in the start-up economy, new entrepreneurs are going after a specific niche: providing rides for children.
These start-ups are nibbling at the industry’s fringes, where Uber and Lyft — at least officially — don’t go. (Per policy at Uber and Lyft, drivers are not supposed to give rides to unaccompanied minors.)
Although they are still testing the waters in a small number of markets, the sector is already becoming competitive. It’s part of a bigger trend of ride-hailing, with services finding ways to capture a very specific market segment, said Harry Campbell, who writes about the industry at his blog TheRideShareGuy.com and is a driver for Uber and Lyft.
Full-time working mothers started HopSkipDrive, which serves all of Los Angeles County and much of Orange County. The company has received $14.1 million in funding and said revenue was growing 30 percent monthly. It was preceded by Shuddle, which began in 2014 and has raised $12 million.
To help reassure worried parents, these companies provide a level of safety and security that the Ubers of the world do not, including fingerprinting and extensive interviewing, and they use software that monitors the driver’s speed and conduct. Many companies operating in California also rely onTrustLine certification, that state’s official screening program for in-home caregivers.
Almost all the drivers for these services are women — often teachers, nannies, day care workers and mothers. Most companies carry insurance that exceeds state requirements and covers liability related to driver (or babysitter) conduct.
These niche start-ups are also coming up at a time when there is industry skepticism about whether on-demand services can offer price and convenience competitively for the long term.
To a certain extent, many of these start-ups still compete against Uber or Lyft because many drivers for those companies don’t know about the unaccompanied-minor policy or choose to look the other way once they have picked up an underage passenger. “I would say between 10 and 20 percent of rides are minors and it’s increasing,” said Mr. Campbell, who corresponds with hundreds of drivers a day because of his blog.
As parents try these services, they are becoming more comfortable with the idea of allowing a stranger to drive their children. Ms. Aluise, for instance, receives a photo of the car and driver ahead of time, which she places inside her daughter’s lunchbox. The driver wears a HopSkipDrive shirt and uses a password that confirms her identity to Emma.
Ms. Aluise receives a text message when her daughter gets in the car and when she arrives at her destination, and during that time Emma is never unsupervised. Last year Ms. Aluise spent $150 a week for her babysitter to pick Emma up twice a week from school. “I didn’t know anything about her car either, so that was a little terrifying,” she said.
Word-of-mouth marketing and referrals are crucial. “Mom networks are very important for us,” said Joanna McFarland, a co-founder and the chief executive of HopSkipDrive. “We have found that when you solve one parent’s problem and make their life easier, they will tell other parents.”
Ride-hailing for children appears to have started in 2013 with Boost, a youth transportation service created by the business innovation group at Mercedes-Benz Research and Development North America in Sunnyvale, Calif. Boost serves the Silicon Valley area and is still considered a pilot program, although it’s growing at a rate of 10 percent annually. Children are transported in Mercedes-owned vans, drivers are certified bus drivers, and there is a concierge on board to accompany children and engage them during the drive.
Since then, entrepreneurs have offered additional services to consumers as they try to set themselves apart from the competition. Zum, which started in January in the San Francisco Bay Area, provides babysitting, if needed, in conjunction with rides for children ages 5 to 15. One of its drivers, for example, helps a single mother — who has a 9 a.m. board meeting each week — by arriving 45 minutes early to babysit her 5-year-old daughter, give her breakfast and get her to school, walking her to class and ensuring she is settled before leaving.
Zum just completed a seed round of funding for a little more than $1 million. During its early phase, revenue and customers were growing 65 percent month over month. Today, the company provides 150 to 200 rides a day.
Like other start-ups, Zum allows parents to schedule rides ahead of time (even for the entire year) or call for an on-demand ride. All of Zum’s drivers work either a morning or afternoon shift for five to six hours a day, so they rarely drive for other services, said Ritu Narayan, a co-founder of the company while she was a group product manager at eBay.
One company in this sector has already repositioned itself in response to customer feedback. Kango, which serves the San Francisco Bay Area, started as KangaDo, a platform for parents seeking car pools in their neighborhoods. Although that function still exists, the company changed its model after parents said they wanted nonshared rides for their children and babysitting services. New customers can interview drivers or take a preliminary ride with them, which helps younger children get comfortable with a driver before taking a solo ride.
Many of these companies have modest expansion plans, in large part because of the need to hire well-vetted drivers.
“It takes a lot of work to keep supply and demand in balance, to keep the driver pool matched to the customer pool and remain 100 percent reliable, so we’ve taken very pragmatic views on growth,” said Doug Aley, chief executive of Shuddle. “The demand is there, but it’s not the same as in other industries. If you don’t get your groceries delivered it’s not the end of the world, but we’re talking about someone’s child.”
The extra safety and security measures as well as other features translate to rides that are, on average, more expensive than a ride with Lyft or Uber. For example, HopSkipDrive’s rides are about 10 to 15 percent higher and Kango’s roughly 15 to 20 percent higher.
Still, higher fares are not seen as a deterrent because this business is driven, in part, by a force more powerful than economics.
“One factor in this market people don’t talk about is the guilt,” said Ms. McFarland of HopSkipDrive. “There’s no shortage of that.”