The yellow school bus is an iconic piece of Americana, trucking kids to-and-from school for decades.
To Ritu Narayan, founder and CEO of Zum, a transportation startup, it looked like an opportunity for disruption.
In a conversation with Fortune’s Matt Heimer at Fortune Brainstorm AI Singapore on July 31, Narayan described why she decided to disrupt the staid yellow school bus, and how Zum is using AI to remap bus routes on the fly and give power back to the grid.
“Parents used to tell us ‘I can track my package using Amazon. I can track my pizza. But I have no idea where my children are, and why is that?’” she said. “As a parent, it is frustrating when you don’t know where the bus is.”
This transcript has been lightly edited for clarity.
Matt Heimer, Fortune executive editor for features: I want to frame things here with a personal story. I have a cousin who’s in his early sixties and he drives a school bus in the suburbs of Minneapolis. And he swears up and down that the bus that he’s driving kids to school in every morning and every afternoon is the very same school bus that he was riding in in 1974. His initials are carved into the backseat, the whole works.
Which is all to say that school bus transportation is an industry that’s ripe for disruption, and that is what Ritu and Zum have been doing.
So tell us a little bit more about how you chose this business challenge. What made you decide this is a problem that was urgent to tackle?
Ritu Narayan, Zum founder: Zum solves a student transportation problem that has not changed in 80 years. Kids today are riding the same way they were riding for the last 80 years, or you and I did, or our grandparents did.
A few years back, I was working for eBay when my kids transitioned to school and I was seeing every industry around me getting disrupted, using technology. But when it came to picking up and dropping off my children, it was the Dark Ages. And interestingly 30 years before that, my mom, who was an educator, had left the job for the exact same reason.
It was kind of a curiosity why nothing had changed in this area.
With Zum, what we have done is reimagine the entire student transportation [system] by connecting every single stakeholder, from parents to children, to drives, to operations, to schools, on one single platform to bring transparency, efficiency, safety, and reliability.
MH: So to make this work, the children have an RFID card that tracks their location in a network that brings the buses and the schools together.
RN: Yes, absolutely. Our routing technology has all the routes in the system. Drivers are using tablets, and when the child is boarding the bus, they tap the RFID card. Parents get notified that their child is on board the bus. The school knows where your children are. When children get off the bus, they tap the card again, and everybody knows in the system that they have off-boarded the bus.
We have 98% plus on time arrival and transportation for children, which matters a lot.
MH: It’s better for attendance. Essentially, it improves the education system for the child, and for parents—especially parents in the service economy with jobs where the schedules aren’t flexible. They don’t have to worry about missing a day of work if the kid can’t go to school.
RN: You wouldn’t believe it’s such an antiquated system, using paper and pen and tracking that way. Parents used to tell us “I can track my package using Amazon. I can track my pizza. But I have no idea where my children are, and why is that?” That’s the problem we are solving.
MH: Because this is an AI-centric crowd, and it is Fortune Brainstorm AI, talk a little bit about the role that AI plays in this kind of tech stack that you’re bringing to the schools and the parents.
RN: AI is central to our business, and I’m going to talk about three specific use cases which might be new to this particular group.
The three specific use cases where we use AI: Number one is our AI driven routing technology and parent app. Number two is our vehicle to grid charging program. Third is operational productivity, given how many people are involved. Thousands of drivers and operational staff, and how we use [them].
So let me talk about each one of these in a little bit more detail.
The first, our routing technology: Very soon, in a couple of weeks, the U.S. is back to school. Hundreds of thousands of students are going to go back, and we have to design and redesign the routes for every single school district according to the local conditions.
Our routing software is able to create these routes very quickly in record time [for] what would take months for these school districts, and in real time, optimize them based on various variables, like traffic conditions, the school schedules that are there, the preferences and classes of children that are happening in different varieties of school.
By doing that, we are able to optimize the commute time for students, and that is huge.
MH: If, heaven forbid, a bus were to break down, the system could very quickly adapt to that and reroute and scramble to make sure everybody got where they needed to be.
RN: That’s the kind of peace of mind for everybody in the system. That no matter what, this technology will really help guide and use the existing infrastructure to continue to make transportation happen every single day.
Our parent app basically provides a very accurate ETA. Parents can track the kids in real time and they know exactly when the bus is arriving, when the bus is leaving.
As a parent, it is frustrating when you don’t know where the bus is. So [the app] not only brings peace of mind to parents and all the schools and school districts, but it also reduces the commute time for students and saves schools money by designing the system in such a way that you are using the most optimal size of the vehicle.
MH: The money saving is an urgent point too for public schools in the U.S., which are very often quite under-resourced.
Many of the buses you’re introducing are electric. How does the vehicle-to-grid system work? What is it designed to do?
RN: Electric school buses are having a moment. School buses are the ideal asset to be electrified. They are the largest batteries on wheels, typically four to six times [the size of a] Tesla battery. They are one of those transportation vehicles that have very unique commute patterns, and they’re not used for transportation in the peak demand of energy, which is typically evenings and summertime.
We have made a decision from day one that all of our electric buses are equipped with bidirectional charging. When the buses finish the transportation at the end of the day, they come back to the lot, they get plugged into the grid, and using our AI-driven vehicle-to-grid technology, they provide energy back to the grid. By doing that, they actually create a very powerful virtual power plant which is powering the homes in a very clean energy way in the local communities.
It’s such a big win. It not only reduces the emissions in the electric vehicle, it also reduces emissions and [improves] the grid resiliency in the community.
MH: And AI is overseeing a lot of that interchange to make sure that the power needs match the…
RN: It’s the AI-driven virtual power plant which knows exactly when to charge the buses, when to discharge them, and what’s the optimal way to do it.
MH: You’ve recently had a new funding round that, among other things, gave your company unicorn status. What are some of your plans? How do you plan to deploy the new financing? What are the next steps in the building of the business?
RN: I’m proud to say our last round was led by GIC, which is a Singapore-based sovereign fund but invests globally around the world. They look for business that can be scaled and very long-term in outlook. We are very proud to partner with them in AI, using AI to decarbonize the transportation industry and make a big impact on society.
If I were to talk about our plans: It’s the momentum, essentially momentum and expansion, and momentum and electrification. We are in 4,000 schools across the country in 14 states, and we recently announced that Oakland is the first school district in the country to be 100% electric with bidirectional charging, giving 2.1 gigawatt hours of energy back to the grid.
Our goal is we are not going to stop until every child across the globe has that access.
