The yellow school bus is an icon of American culture and has been transporting children to and from school for decades.
For Ritu Narayan, founder and CEO of transportation startup Zum, this looked like an opportunity for disruption.
In conversation with Fortune's Matt Heimer at Fortune Brainstorm AI Singapore on July 31, Narayan talked about why he decided to destroy the stuffy yellow school bus and how Zumm is using AI to instantly remap bus routes and feed power back into the grid.
“Parents have told us, 'With Amazon, I can track my packages, I can track my pizza, but I don't know where my child is. Why?'” she said. “As a parent, it's frustrating when you don't know where the bus is.”
This transcript has been lightly edited for clarity.
Matt Heimer, Editor-in-Chief, Fortune Magazine: I want to share a personal story here. My cousin is in his early 60s and he drives a school bus in the Minneapolis suburbs. He swears that the bus that takes kids to school every morning and every night is the exact same school bus he rode in 1974. It has his initials on the back seat, and everything is the same.
In short, school bus transportation is an industry prone to disruption, and that's exactly what Ritu and Zum have done.
So can you tell us a bit more about how you chose this business challenge? What made you decide this was an urgent problem to tackle?
Ritu Narayan, founder of Zum: Zum solves a student transportation problem that hasn't changed in 80 years. Kids today ride bikes the same way they have for the last 80 years, or the way you or I or our grandparents used to.
A few years ago, when my kids were starting school, I was working at eBay and watching technology disrupt industries all around me. But when it came to getting my kids to and from school, it was a dark time. And interestingly, 30 years earlier, my mother, an educator, had left her job for the exact same reason.
It was kind of a curiosity as to why nothing had changed in the area.
Zum has reimagined the entire student transportation (system) by connecting all stakeholders – from parents to kids, drivers, operations and schools – on one platform to bring transparency, efficiency, safety and reliability.
MH: To achieve this, children have RFID cards that track their location within a network that links the bus to the school.
RN: Yes, absolutely. Our routing technology has all the routes in the system. The driver has a tablet, and when the kid gets on the bus, they tap their RFID card. The parent is notified that their child is on the bus. The school knows where their child is. When the kid gets off the bus, they tap their card again, and in the system, everyone knows that the kid has got off the bus.
We have an on-time arrival and drop-off rate of over 98% for your child, which is very important to us.
MH: It improves attendance. It basically improves the education system for kids and parents, especially parents who work in the service industry, who don't have flexible schedules. Parents don't have to worry about taking time off work if their kids can't go to school.
RN: Pen and paper tracking is an incredibly antiquated system. Parents would say, “I can track my packages with Amazon. I can track my pizza. But I don't know where my kid is. Why?” That's the problem we're trying to solve.
MH: Since this is an AI-centric audience and this is Fortune Brainstorm AI, can you talk a little bit about the role that AI plays in this kind of tech stack that you're providing to schools and parents?
RN: AI is central to our business, and I want to talk about three specific use cases that may be new to this particular group.
There are three specific use cases where we use AI. The first is our AI-driven routing technology and parent app. The second is our vehicle-to-grid charging program. The third is operational productivity given the number of people involved — thousands of drivers and operational staff and how we leverage them.
Now, let me explain each one in a bit more detail.
First, our routing technology. Soon, within a few weeks, schools will be reopening in the United States. Hundreds of thousands of students will be returning to school, and routes will need to be designed and redesigned for every school district depending on local conditions.
Our routing software can very quickly create routes in record time that would take these school districts months to create, optimizing them in real time based on a variety of variables, including traffic conditions, school schedules, and the preferences and classes of children who attend different types of schools.
This will help optimize students' commute times, which is a huge benefit.
MH: If a bus were to break down, the system would react immediately, reroute and rush to get everyone to their destination.
RN: That's reassuring for everyone in the system that no matter what, this technology is really going to help guide and leverage the existing infrastructure to keep transportation moving every day.
Our parent app basically gives us a very accurate ETA, parents can track their kids in real time and they know exactly when the bus is going to arrive and when it's going to leave.
“As a parent, it's frustrating not to know where your bus is, so (this app) not only provides peace of mind to parents and all schools and districts, but it also shortens commute times for students and saves schools money by designing the system to use the optimally sized vehicles.”
MH: Saving money is also an urgent issue, as public schools in the U.S. are often underfunded.
Many of the buses we deploy are electric. How does the vehicle power system work and what is it designed to do?
RN: Electric school buses are gaining attention. School buses are an ideal asset for electrification. They are the largest batteries on wheels, typically 4-6 times the size of a Tesla battery. School buses are one of those modes of transportation with very unique commute patterns and are not used at night or in the summer when energy demand is at its peak.
We decided from the beginning that all of our electric buses would have bidirectional charging capabilities. When the buses finish their journey at the end of the day, they return to the parking lot, plug into the grid, and use AI-driven vehicle-to-grid technology to put energy back into the grid. In doing so, they actually create a very powerful virtual power plant that powers the homes of the local community with very clean energy.
This is a huge win: not only will electric vehicles reduce emissions, but they will also reduce community emissions and make our power grid more resilient.
MH: And AI is monitoring a lot of that interaction to make sure that power demand is matched…
RN: It's an AI-driven virtual power plant that knows exactly when to charge the buses, when to discharge them, and what the best way to do that is.
MH: You recently raised a new funding round and achieved unicorn status. What are your plans going forward? How do you plan to use the new capital? What are the next steps in building your business?
RN: We are proud that our last round was led by GIC, a sovereign wealth fund based in Singapore that invests globally around the world. They are looking for businesses that can scale and have a very long-term perspective. We are very proud to partner with them in the AI space and use AI to decarbonize the transportation industry and have a profound impact on society.
So when I talk about our plan, it's momentum, essentially momentum and expansion, momentum and electrification. We're in 4,000 schools across the country in 14 states, and we recently announced that Oakland will be the first school district in the nation to go 100% electric with bidirectional charging, putting 2.1 gigawatt hours of energy back on the grid.
Our goal is not to stop until every child in the world has access to it.
